What to do when your retail property is flooded in NSW?

1. The tenant should notify the agent or landlord

As soon as the tenant is aware of the damage caused to the premises, they should notify their agent or landlord with details of what has been damaged, when and by what means.

2. Contact your lawyer or review your lease

Most leases generally contain a damage and destruction clause that outlines what occurs when the property is damaged by flooding. If the lease is retail, then additional protections are provided by the relevant legislation in each state.

3. Who is responsible for the clean-up of the premises?

There are varying factors that determine who is responsible for the clean up including type of lease, type of premises and relevant insurance.

The tenant is normally responsible for cleaning the inside of the premises. If there is a common area with other tenants then the landlord is responsible for cleaning this area. If this does not occur, then the tenant is entitled to compensation for any loss the tenant has suffered.

4. Who is responsible for structural repairs?

Generally, the responsibility rests with the landlord. If the landlord fails to do this within a reasonable time, then the tenant may be entitled to compensation.

5. Compensation for when the tenant cannot operate in the premises

The lessee is not liable to pay rent or any amount payable to the lessor in respect of outgoings or other charges during the period where the shop cannot be used. If the tenant can operate in part of the premises, then only part of the rent should be paid.

6. Right of termination

If the lessor considers that repair is impractical or undesirable, the lessor or the lessee may terminate the lease by giving not less than 7 days notice in writing to the other. If the lessor fails to repair the damage within a reasonable time after the lessee requests the lessor in writing to do so, the lessee may terminate the lease by giving not less than 7 days notice in writing of termination to the lessor.

7. Where to obtain a copy of your lease

If the lease is registered, then a search can be conducted on the title and a copy obtained. If the lease is not registered, then either ask the other party or the lawyers who represented the parties.

8. Insurance

Review the lease to identify if a policy is in place by either party and if this includes flooding. If that party did not obtain such insurance, then a claim
could be made against that party.