The Risks of DIY Commercial Real Estate Management in Australia: Let's Talk Penalties!

Allison Brudenell
The Risks of DIY Commercial Real Estate Management in Australia: Let's Talk Penalties!

The commercial real estate market in Australia can be a lucrative investment opportunity, attracting landlords looking to maximise their returns. While self-managing properties may seem like a cost-effective approach, it is essential to recognise the risks involved. This article explores the potential pitfalls of self-managing commercial real estate in Australia, focusing on legislation such as the Retail Leases Act and Occupational Health and Safety (OHS) considerations, while highlighting the penalties landlords may face for non-compliance.


The Retail Leases Act

In Australia, the Retail Leases Act (RLA) is a crucial legislation governing lease agreements for retail businesses. While the specific details vary between states and territories, the RLA aims to protect the interests of tenants and ensure fairness in lease agreements. Self-managing landlords may face challenges in navigating the complexities of the RLA, potentially leading to legal disputes and financial liabilities.

Failure to comply with the RLA can result in penalties and legal repercussions. For instance, in New South Wales, breaching the RLA can attract fines of up to $22,000 for individuals and $110,000 for corporations, as well as the potential for compensation claims from affected tenants. It is vital for landlords to understand their obligations under the RLA or seek professional assistance to mitigate these risks.


Occupational Health and Safety (OHS) Considerations

Maintaining a safe and healthy work environment is crucial for commercial property owners. Self-managing landlords must be aware of their responsibilities regarding OHS requirements. Failing to meet these obligations can result in injuries to tenants or their employees and expose landlords to legal actions and substantial financial consequences.

Landlords are required to identify potential hazards, ensure regular maintenance of the premises, and provide necessary safety measures such as fire extinguishers, emergency exits, and proper lighting. Neglecting OHS considerations can lead to legal liabilities and penalties under the applicable state or territory legislation.

For instance, in Victoria, breaches of OHS regulations can lead to significant penalties. The Occupational Health and Safety Act 2004 sets out fines of up to $3.5 million for corporations and $697,000 or imprisonment for individuals found guilty of serious offenses. Self-managing landlords should prioritize OHS compliance to protect the well-being of tenants and mitigate potential legal risks.


Penalties for Non-Compliant Landlords

The penalties for non-compliant landlords in Australia can be severe, highlighting the importance of adhering to legislation related to commercial real estate management. In addition to the penalties mentioned earlier under the RLA and OHS regulations, landlords may face other consequences for non-compliance.

In various states and territories, regulatory bodies have the authority to issue infringement notices, fines, and orders requiring rectification or specific actions. In some cases, repeated offenses can lead to criminal charges, significant monetary penalties, and even imprisonment.

Self-managing commercial real estate in Australia comes with inherent risks, particularly regarding compliance with legislation such as the Retail Leases Act and Occupational Health and Safety regulations. Landlords who choose to self-manage must familiarise themselves with the specific requirements and obligations outlined in the relevant legislation, or alternatively, seek professional assistance like the services of MMJ’s Commercial Asset Management team, to ensure compliance and mitigate potential legal and financial risks.

By understanding the legal framework surrounding commercial real estate management, including the Retail Leases Act and OHS considerations, landlords can better protect themselves and their tenants, maintaining a harmonious and safe business environment.

Need advice on your commercial asset?

Buying Real Estate Selling Real Estate Commercial Real Estate Investing in Real Estate Real Estate News Awards Residential Real Estate Commercial Property Auction Renting Selling Sydney Office Leasing First Home Buyers Hints & Tips Renting Real Estate Office Leasing Pets Wollongong Illawarra Lease Wrap Retail Property Childcare Childcare Investments WA MMJ News Awards & Recognition Green Buildings Portfolio Managemnt Track Record Investment Investment Property Buying Buying Northern Suburbs Commercial Centres Community Charity MMJ Team Pricing Indicators Pricing Attracting Buyers Interest Rates Events Office Fit-Out Interior Design Leasing Commercial Leasing Tenants Landlords Finances Market Conditions Trends Offices Property Styling Property Investing Business Sales Research Property Management #realinvestor government Government Grants Renting Property Selling Guide Sixty Years MMJ Teams COVID-19 Town Planning Property Development Project Marketing Advisory rent rent Valuation Development Real Estate Next Move Developers New Appointment Melbourne Real Estate MMJ Family Asset Services NSW Child Care Investments Child Care Perth Real Estate Asset Management active apartment penthouse Employee Sydney Real Estate Wollongong Real Estate Legislation Industrial Empowered Stars Of Wollongong Business Sales Team Business Spotlight rental property MMJ Nowra 2023 Housing Market Auction Clearance Rates Residential Sales Town Planning & Advisory Industry Change Laws Commercial Sales Commercial Management Residential Management MMJ Wollongong MMJ Central Coast Strata Issue 8 Hysata Sicona History Conveyancer Solicitor Commercial Market Update Commercial Asset Management Making A Difference Types of Buyers 2024 Listing Your Home Smoke Alarms Issue 9 Escabags BubbleBerry Rental MODCO Property Market