Retail Shop Lease Outgoings QLD

What can landlords recover?

Outgoings are the landlord’s costs of operating, maintaining and repairing the building or centre. Common examples are council rates, water rates, insurance, cleaning, security, and air-conditioning and lift maintenance.

Under the Retail Shop Leases Act 1994 (Qld):

• you only pay outgoings the lease specifies, along with how they are worked out, shared and recovered
• outgoings must be the landlord’s reasonable expenses of operating, maintaining or repairing the building or centre
• your share can’t be more than your shop’s area as a proportion of the total lettable area that benefits from the outgoing

Outgoings should also match what the lessor disclosure statement told you. If they don’t, you may have rights under the Act.

Capital costs, such as replacing a roof or major plant, depreciation and the landlord’s finance costs are generally not recoverable as outgoings.

Estimates in the disclosure statement

The lessor disclosure statement must include an estimate of outgoings and the tenant’s share. At least 1 month before each accounting year, the landlord must also give the tenant an estimate for that year. You usually pay monthly instalments based on the estimate.

Annual audited statements

Within 3 months after each accounting year ends, the landlord must give the tenant a statement of the outgoings actually spent, with an auditor’s report. The lease usually provides for an adjustment: if you paid more than your share, the difference is credited or refunded, and if you paid less, you pay the balance.

Checking outgoings

When we look at an outgoings statement, we check for:

• items that weren’t disclosed or aren’t allowed by the lease
• capital items charged as outgoings
• management fees above what the lease permits
• errors in your share or the lettable area used
• large jumps from the estimate without explanation

Before you sign a new lease, outgoings are part of our retail lease review.

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Outgoings disputes

Start by asking the landlord in writing for invoices and a breakdown.

If not, retail tenancy disputes in Queensland go to mediation with the Queensland Small Business Commissioner, and then to the Queensland Civil and Administrative Tribunal (QCAT) if mediation doesn’t resolve them. See retail shop lease disputes in Queensland.