ACT Commercial Maintenance: Make Good Clauses and Structural Repairs

Unlike residential tenancies where the landlord guarantees habitability, commercial property maintenance in the Australian Capital Territory (ACT) is defined almost entirely by the negotiations captured in the lease agreement. The primary statute governing these obligations is the Leases (Commercial and Retail) Act 2001 (ACT), which commenced on 1 July 2002. While the Act provides a regulatory framework, it is largely silent on the specific division of maintenance obligations, leaving these to be determined by the lease agreement, except for specific rules regarding damaged premises (Sections 88–91).

Structural vs. Non-Structural Repairs

Maintenance and repair obligations are not statutorily divided by the Act; they are governed by the terms of the lease agreement. While common practice assigns structural repairs to the landlord and non-structural to the tenant, this is a contractual negotiation rather than a statutory mandate.

1. The Landlord's Responsibility: The landlord is typically responsible for repairing the "fabric" of the building. This includes the roof, load-bearing walls, foundations, and exterior cladding.
2. The Tenant's Responsibility: The tenant is generally responsible for all non-structural repairs within their defined premises. This includes internal walls, flooring, lighting, plumbing fixtures, and maintaining the HVAC system serving their space.

Damaged Premises (Sections 88–89)

Unlike general maintenance, the Act provides specific rules if the premises are damaged. Under Section 88, if premises are damaged so as to be unfit for use, the tenant is not liable for rent or outgoings for the period they cannot be used. The lessor must notify the tenant within 30 days of the damage whether they intend to repair the premises (Section 89). If the lessor fails to repair within a reasonable time, the tenant may terminate the lease.

The "Keep in Repair" Clause

Commercial tenants are usually required to "keep" the premises in a good state of repair. It is crucial for tenants to establish exactly what condition the property was in on day one.

• Condition Reports: Best practice in the ACT is to attach a photographic Condition Report (or Schedule of Condition) to the lease. The lease is then drafted to ensure the tenant only has to maintain the property to the standard shown in that report, preventing them from being liable for pre-existing damage.

Multi-Let Buildings and Service Charges

If a property in the ACT is a multi-tenant office building or retail center, the landlord is responsible for maintaining the interior common areas (lobbies, shared bathrooms, lifts).

However, the cost of this maintenance is not borne by the landlord. The landlord carries out the repairs and cleaning, and recovers the costs from all the tenants via a Service Charge (often referred to as 'Outgoings'). Under sections 70 and 71 of the Leases (Commercial and Retail) Act 2001, a landlord may only recover outgoings that are specifically identified in the lease and disclosed in the required Disclosure Statement provided before signing.

• The landlord must provide an outgoings estimate at least 14 days before the lease begins and an audited outgoings statement within 3 months after the end of the relevant period (Section 71).
• The lease will dictate the tenant's proportion of the service charge, usually based on their percentage of the total lettable area.

The "Make Good" Obligation (End of Lease)

The most contentious maintenance issue in commercial real estate occurs when the lease ends. Most ACT commercial leases contain a rigorous Make Good clause.

When handing the keys back, the tenant must "make good" the premises. Depending on the lease wording, this can require the tenant to:

• Remove all their branding, furniture, and inventory.
• Remove any partition walls or custom fit-outs they installed.
• Repaint the walls.
• Replace carpet or flooring to match the condition it was in at the start of the lease. It is important to note that tenants are generally protected by "fair wear and tear" provisions, which exempt them from liability for gradual deterioration over time unless the lease explicitly overrides this standard.

If the tenant fails to make good, the landlord will hire contractors to do the work and draw the cost directly from the tenant's Bank Guarantee (Security Deposit).

Additional Territory Context for ACT

The Australian Capital Territory (ACT) operates under a specialized legal structure due to its status as the nation's capital. For commercial and retail leases, the relationship between landlords and tenants is primarily governed by the Leases (Commercial and Retail) Act 2001, which commenced on 1 July 2002. This Act establishes minimum disclosure obligations, regulates outgoings recovery (ss 70–71), and provides a framework for dealing with damaged premises (ss 88–89). Jurisdiction for disputes up to $250,000 lies with the ACT Magistrates Court (s 144), provided parties have first attempted mediation (s 147). It is distinct from the residential framework under the Residential Tenancies Act 1997, which does not apply to commercial leases.

For investors and commercial landlords, understanding the specific maintenance standards required — including structural obligations, outgoings transparency, and make good provisions — is essential for ACT compliance. Landager's platform is designed to track these recurring commercial obligations, ensuring that your property portfolio remains aligned with the Leases (Commercial and Retail) Act 2001 requirements while providing clear communication channels with your commercial tenants. Regardless of whether you manage a single shopfront or a large commercial portfolio in Canberra, the legislative baseline remains consistent across the ACT.

How Landager Helps

Managing commercial properties in the Australian Capital Territory (ACT) requires strict adherence to the Leases (Commercial and Retail) Act 2001, particularly regarding mandatory outgoings disclosure, make good obligations, and the handling of damaged premises. Landager simplifies ACT commercial compliance by tracking outgoings disclosure requirements under sections 70 and 71 of the Act, managing condition report records to protect against spurious make good claims (accounting for fair wear and tear), and documenting lessor notification obligations under section 88 where premises are materially damaged. From tracking repair requests to maintaining digital lease records that satisfy ACT commercial tenancy standards, Landager provides the tools to manage your Canberra commercial portfolio with confidence.

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