Property and Leasing Update

Advisory Opinions for Essential Safety Measures in Retail Premises –Who will Pay?

A VCAT advisory opinion from Justice Garde VCAT reference VCAT 2015/478 available on the Small Business Commissioners Website. A first and welcome way of getting the message out to the Retail Leases Sector.

It covers off the issue of whether essential safety measures under the Building Regulations 2006 and the landlords repair obligations under the Retail Leases Act.  The opinion whilst being non binding will carry significant weight.

The regulations create the owners obligations to maintain and repair essential safety measures. The lease may have provision for this to be later collected from the tenant as an outgoing. The advisory opinion strengthens the argument that the Landlord is responsible for the maintenance of essential safety measures and is prohibited for passing that on to the tenant. The tenant  will not be responsible says the VCAT.

Valuations – Land Titles

Project with Land Victoria and Department of Environment, Land Water and Planning (DELWP) to now introduce a waterway notation to affected plans, to alert purchasers about the possible location and use of Crown frontage,initially on titles for land adjacent to licenses Crown frontages and then progressively, on plans of properties abutting Crown frontage, which will give more opportunity to identify licenses or requirements to obtain a licence for Crown land or riparian land.

Recent Cases

Cahill v. Kenna in NSW Supreme Court

The dispute was between property developers who had a joint venture. In the winding up of the JV dispute arose about the value to be adopted.

One valuer took into account that the land was a beachside suburb and it siting, the other did not so complain that he underpraised the land from the co Joint venturer. One considered planning advice as to the highest and best use of the land and the other could not get agreement from the JV partners to refer to its highest and best use in his report, which Judge said was the right way to handle it in the valuation.

One of the JV partners brought in Colliers valuation made for mortgage purposes.   Judge disregarded Colliers valuation and Judge sported the premise that Valuations are not an exact science and some matters may appear to be relevant  but are not relevant at all. And the lawyers were paid to argue over this!

Epping Hotels Pty. Ltd. v. Serene Hotels Pty. Ltd.

“Use of profit method to determine current rent” -   by valuer when determining the current market rental of a hotel.

Lease was for premises where tenant ran hotel business with gaming facilities. Appointed specialist valuer requested trading accounts which tenant supplied  but commented that Section 37 (2)  criteria the valuer  should  be cautious in using the  trading figures.

On appeal the Supreme Court found that it is permissible for a valuer to use the  “profits method” under Section 37 (2) of the RTA and further, the valuer is allowed to assume the existence of the tenants fixtures and fittings, for the purposes of adopting the profit method, provided  the value of those fixtures and fittings  is treated in the calculations in such a way, that the value is in effect “cancelled out”.

If you have any queries regarding the above, please contact Pippa Sampson or Adriane Whiticker of our office.

Leave a Reply