Unlike residential tenancies—where the landlord has an overarching statutory duty to maintain the property—commercial maintenance responsibilities in South Australia are largely dictated by the terms of the lease agreement. The Retail and Commercial Leases Act 1995 (RCLA) provides baseline protections for "retail shop leases" where the annual rent does not exceed the prescribed threshold ($420,000 per annum exclusive of GST, effective 1 July 2025). For leases above this threshold or non-retail commercial leases, the specific allocation of repair duties is primarily a matter of negotiation.

General Allocation of Responsibility

In most SA commercial leases, the responsibilities are divided as follows:

Landlord's Responsibility (Typically)

• Structural Repairs: The landlord is generally responsible for maintaining the structural integrity of the building—the roof frame, external walls, foundations, and common area infrastructure.
• Capital Costs: Under Section 32 of the Act, provisions requiring retail shop lessees to pay capital costs (including many structural repairs) are void for leases under the $420,000 threshold.
• Base Building Systems: Systems that serve the entire building (main water supply, fire safety systems, lift mechanisms) are typically the landlord's responsibility.
• Common Areas: The landlord maintains shared spaces like lobbies, car parks, walkways, and public toilets.

Tenant's Responsibility (Typically)

• Internal Fit-Out: All fixtures, fittings, signage, and internal decoration installed by the tenant.
• Internal Maintenance: Keeping the interior of the leased premises clean and in good repair.
• Specific Systems: Depending on the lease, the tenant may be responsible for maintaining their own dedicated HVAC unit, grease traps (for restaurants), and internal plumbing.

Outgoings and Cost Recovery

While the landlord arranges and pays for common area maintenance, the cost is typically recovered from tenants via outgoings charges. These are the SA equivalent of CAM (Common Area Maintenance) charges.

Key rules under the Act (for retail shop leases):

• Annual Estimates: The landlord must provide the tenant with a written estimate of outgoings at least one month before the beginning of each accounting period.

• Audited Reconciliation: Within 3 months after the end of each accounting period, the landlord must provide a report of actual expenditure. This report must be prepared by a registered company auditor unless the outgoings are limited to water/sewerage rates, local government rates, and insurance, and the landlord provides the tenant with copies of the relevant invoices.
• Land Tax Exclusion: Under Section 30 of the Act, land tax cannot be recovered from tenants in retail shop leases under the threshold. However, land tax recovery is negotiable and permitted for non-retail commercial leases or those exceeding the $420,000 rent threshold.

"Make Good" Obligations

At the end of a commercial lease, tenants are typically required to "make good" the premises—restoring them to a condition agreed upon in the lease (often the original condition at the start, less fair wear and tear).

Make good requirements commonly include:

• Removing the tenant's fit-out, fixtures, and signage.
• Repairing any damage caused during the fit-out removal.
• Repainting walls and restoring flooring to its original state.

Best Practices for SA Commercial Landlords

• Define "Structural" Clearly: The lease must precisely define what constitutes a "structural" repair (landlord's responsibility) versus an "internal" repair (tenant's responsibility). Ambiguity over whether the roof membrane (as opposed to the roof frame) is structural leads to costly disputes.
• Conduct Regular Inspections: Periodic inspections (with proper notice) allow you to identify issues early—before a minor maintenance item becomes a major capital repair.
• Include Detailed Make Good Clauses: Your lease must be extremely specific about what the tenant must do at the end of the lease. Vague "make good" clauses lead to expensive Magistrates Court disputes.

How Landager Helps

Landager helps you track maintenance responsibilities across your commercial portfolio. Store your lease agreements centrally and quickly identify which repairs fall to you versus the tenant. Our maintenance portal logs all repair requests and vendor invoices, simplifying annual outgoings reconciliations.

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