Severe Weather, Flooding and Leases


With severe flooding and weather events ravaging most of the Eastern coast of Australia in recent times, it is important for tenants to understand their rights if their leased premises becomes damaged or destroyed, or if they are unable to gain access. Each Lease is unique, and it is important to carefully review the specific clauses prior to entering into a Lease

Damage and Destruction Clauses in Leases

A common Leasing clause in commercial and retail leases is a ‘damage and destruction’ clause. Such clauses are never quite the same but typically provide that if the premises is damaged or destroyed through no fault of the tenant, and the tenant cannot use or access the premises, the requirement to pay rent is temporarily suspended.

Further, if the premises is damaged and the tenant’s use is diminished due to the damage or restricted access, the rent is to be reduced to reflect this.

In most cases, the Landlord is not obliged to repair the premises and may decide over a period (usually between 3 to 6 months) whether to repair or restore the premises and both the tenant and the Landlord may terminate if the Landlord elects not to repair. Or, if the tenant requests that the Landlord repairs and within a reasonable time, they have not repaired, the tenant may terminate the lease. In this instance it is important for tenants to provide notice as early as possible.

It is the usual case that if the damage is due to the tenant or its employees or agents, the reduced rent or ability to terminate does not apply.

Drafting Considerations

The wording of these clauses can have large implications on the tenant and Landlord so it is important to have a solicitor with a keen eye for detail to review the Lease.

In practice, key terms such as diminished and inaccessible may not be defined and what the tenant considers to be diminished or inaccessible, may not be considered as such by the Landlord. It should also be confirmed whether the abatement extends to outgoings and any applicable marketing levy and whether the tenants maintenance obligations are also suspended.

The tenant should be aware if there is a provision detailing the process in the event the parties dispute the rental abatement amount or the extent of damage or destruction, such as the appointment of an independent mediator whose costs would be borne equally between the tenant and Landlord. These clauses tend to reduce costs and are beneficial for the parties.

Some clauses will require notice to be given to the Landlord before the application of any rental abatement in which case a tenant should provide notice as soon as possible and in accordance with the requirements of the Lease.


The recent extreme weather highlights the importance of thorough reviews of Leases. Our thoughts are with those grappling with the damage from the recent floods in Queensland and New South Wales.

If you require advice or assistance in relation to your Lease, contact the experienced team at Miller Sockhill Lawyers on 07 5444 4750 and one of our friendly team members can answer any questions you might have.

The content of this article is current at the date of publishing and is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.