A pharmacy is set to receive over $42,000 from its landlord after a determination that it should not have paid management fees
The lessees of a pharmacy in Mandurah, WA, applied to the State Administrative Tribunal with a number of questions, including whether it was lawful for their landlord, Kimbriki Nominees Pty Ltd, to charge management fees.
“The Tribunal determined that the applicant should not pay management fees to the respondent in the future and made orders that the respondent should repay the management fees to the applicant,” noted judge Tim Sharp.
The management fees were paid between about 1 April 2011 to about 27 April 2015.
The lessees, Walter Phillipe and Alan Hipper also complained that the landlord did not review and adjust the rent to the market rent at two-yearly intervals.
They said that “on the proper construction of the lease, and considering the imperative language of the market rent review provisions in the lease, the respondent was required to conduct these reviews”.
The landlord, however, said the wording was such that it could elect whether or not to conduct a market rent review in any given year.
While the Tribunal determined that the landlord should have conducted market rent reviews, it said other questions—as to the rent that should have been paid, the current rent payable and whether the landlord should pay the trustees damages for any overpaid rent—weren’t within its scope.
“The parties need to conduct the relevant rent reviews and only if they fail to reach agreement on the question of what rent is payable can this be referred to the Tribunal,” Judge Sharp said.
The Mandurah Mail reports that after the decision, Peel Chamber of Commerce and Industry Inc manager Andrew McKerrell encouraged small business owners entering into agreements with landlords seek professional advice.
“It would appear that some businesses struggle to fully comprehend regulations and legislation in relation to contractual obligations,” he said.