South Australia Commercial Maintenance Obligations
Understand SA commercial landlord maintenance obligations, structural vs. tenant repairs, and make-good requirements at lease end.
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South Australia Commercial Maintenance Obligations
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 provides some baseline protections, but the specific allocation of repair duties is 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.
- 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:
- Annual Estimates: The landlord must provide tenants with an estimate of outgoings for the upcoming year.
- Audited Reconciliation: At the end of each financial year, the landlord must provide an audited statement of actual outgoings. If the tenant overpaid based on estimates, they are entitled to a refund.
- Land Tax Exclusion: Land tax cannot be recovered from tenants as an outgoing under the Act.
"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.
Common Misconceptions in
Don't fall for these common myths. Know what the law actually says.
"In commercial leases, the tenant is responsible for all repairs."
Responsibility depends on the specific lease terms. In most SA commercial leases, the landlord retains responsibility for structural repairs (roof frame, external walls, foundations, base building services) while the tenant is responsible for maintaining their internal fit-out and specified systems.
"I don t need to provide outgoings reconciliation every year."
The RCLA 1995 requires landlords to provide tenants with both an annual estimate of outgoings (at the start of each year) and an audited statement of actual outgoings (at the end of the year). If actual outgoings are less than the estimates, the tenant is entitled to a refund.
"I can include land tax in the annual outgoings reconciliation statement."
Land tax is expressly prohibited from being recovered from retail shop tenants under the RCLA 1995. It cannot appear in outgoings estimates or reconciliation statements. Including it renders that portion of the charge unenforceable.
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 SACAT disputes.
How Landager Can Help
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.
Frequently Asked Questions:
Structural repairs typically cover the core of the building envelope: roof frame, external masonry, foundations, load-bearing walls, and central building services (main water mains, fire suppression systems, lifts). Internal repairs cover everything the tenant controls: their installed partitions, ceilings, internal plumbing, their own HVAC unit (if separately metered), floor coverings, and signage. The lease should be precise — ambiguity over items like the roof membrane (as distinct from the roof frame) or suspended ceilings (structural or tenant fit-out?) leads to expensive disputes.
The RCLA 1995 requires landlords to: (1) Provide each tenant with an annual estimate of outgoings before the start of each financial year; (2) Provide an audited statement of actual outgoings at the end of each financial year; (3) Make individual outgoings invoices available for inspection by the tenant on request. Failure to provide audited reconciliations can result in the tenant seeking a refund of overpaid outgoings through SACAT.
Make good clauses should be extremely specific. Instead of generic language like restore to original condition, define: (1) Every item of tenant fit-out that must be removed (with reference to the lease schedule of works or the commencement condition report); (2) The standard to which surfaces must be restored (e.g., repainted with two coats of a specific paint system in a neutral colour to be agreed with the landlord); (3) The treatment of flooring (polished concrete, carpet tiles); (4) A timetable for make good works prior to lease expiry. Consider commissioning a make good assessment report from the original fit-out inspector.
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