You may be entitled to compensation if your landlord is carrying out works that are causing disruption to your business.

Some of the situations in which you can claim compensation are:

  • if general works are being carried out by the landlord in your shopping centre or building
  • the shopping centre or building are being redeveloped
  • the disclosure statement provided to you by your landlord didn’t notify you of any planned works.

To find out whether you may be able to claim compensation from your landlord, follow these three steps.

Tip: when you enter into a new retail shop lease, the landlord must provide you with a disclosure statement which should include details of any construction or maintenance works that are currently in progress or planned during your tenancy period.

1 - Refer to your lease

There are some situations that allow your landlord to carry out works to redevelop their shopping centre or building, and these should be outlined in your lease.

As part of any construction works, the landlord should take reasonable steps to minimise the disruption to you and your business.

Your lease will outline both your rights and obligations, as well as those of your landlord, when it comes to notice periods and the kind of works which can be carried out.

2 - Gather the necessary evidence

If you believe you are entitled to compensation (in accordance with what is written in your lease), you’ll need to gather some evidence to demonstrate how the works have impacted on your business. This includes:

  • what the impact of the works is on your business (eg. there is scaffolding that is obstructing entry into your business)
  • the date when the disruption started
  • the dates and times of the day the work was being carried out
  • evidence of the disruption (taking photos at the different times of the day and week are particularly useful to have)
  • when the disruption ended.

To help validate your claims, it is also useful to:

  • monitor your business activity (eg. customer numbers)
  • analyse your sales levels to identify any trading losses
  • determine the kind of compensation you want (eg. an amount of money, rent abatement, a rent-free period or a combination of options).

Tip: Read our guide: How to claim compensation for disruption caused by landlord’s works for a full break down of the evidence you’ll need to gather in order to make a claim.

3 - Contact your landlord

If landlord’s works are affecting your business, it’s best to contact them in writing to:

  • notify them of the disruption
  • give them a reasonable period of time to resolve the issue
  • advise them that you will seek compensation for your losses if the disruption continues.

Providing this information in writing is an important step, as it may be a required under the conditions of your lease as well as being a requirement of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (CTA).

Tip: If you need help in preparing a claim for compensation or need some general guidance on leasing issues, contact our business advisory service.

What can I do if my business is being impacted by other construction work?

If your business is being impacted by other construction projects taking place around the Perth metro area and regional Western Australia, there are steps you can take to minimise their impact. To help you get started read our guide: Surviving in a construction zone.

For more help and information

As part of our free business advisory service, contact us too speak to one of our commercial tenancy advisers for more guidance and advice. We also have a range of free information and tools that can help guide you through this process, including:

Business premises
Legal and risk
20 November 2019