What to do if your business premises are closed by disaster

Nobody wants to think about the impact a disaster or emergency could have on their business – but what would happen if you suddenly couldn’t operate as usual from your premises? 

Serious damage to your premises can interrupt trading, create safety risks and raise difficult questions about rent, lease obligations and insurance. In Western Australia, your rights and responsibilities depend on the terms of your lease, the Commercial Tenancy (Retail Shops) Agreements Act 1985 (where it applies) and common law principles. 

Here are some of the most important things to know if your premises becomes unusable or access is restricted. 

Common causes of lost access or damaged premises

 The most common disruptions include: 

• Fire, flood and structural damage, including burst pipes, ceiling collapses or electrical faults that make the premises unsafe. 
• Landlord works or redevelopment, where access to the premises is restricted during repairs, upgrades or redevelopment. 
• Essential services failures, such as outages of power, water, sewerage or air-conditioning that prevent trading. 
• Neighbouring incidents, such as fire in an adjoining tenancy, police cordon, chemical spill or contamination affecting access. 
• Lease or ownership disputes, where access is restricted due to disputes about possession, rent arrears, or misunderstandings about rights.

Even if the problem originates outside your premises, the impact on your business can be the same with the risk of lost trade, staff disruptions and unexpected costs.

What to do when you cannot operate from your business premises 

Unexpected events and disruptions can prevent a business from operating as usual. When this happens, it’s important to act quickly and understand your position under your lease.

1. Check your lease 

Commercial and retail leases will generally contain a damage and destruction clause which sets out: 

• Whether rent is reduced or suspended when the premises cannot be used. 
• Who is responsible for repairs and reinstatement. 
• Timeframes for repair and reinstatement. 
• When either party may end the lease if the premises cannot be restored within a reasonable period. 

Do not assume that your rent automatically stops. Your rights depend on the wording in your lease and whether the premises are partly or completely unusable.

2. Notify your landlord 

Notify your landlord or managing agent in writing as soon as you become aware of the issue. Provide:

• The relevant dates and times. 
• Photographs or video of the damage. 
• Clear, specific requests (such as repairs, access or temporary rent abatement). This prevents an argument that you failed to alert them or contributed to delays.

Ask your landlord or managing agent for information about: 

• The nature and cause of the damage (if not already clear). 
• Planned repair work and expected timeframe. 
• Whether the landlord considers the premises wholly or partially unusable. 

Remember to keep records of all communications between yourself and the landlord or managing agent.

3. Notify your insurer 

Notify your insurer promptly. Depending on your policy, this may include business interruption or contents insurance. Be prepared to provide: 

• Photographs or video evidence of the damage. 
• Quotes or estimates for repairs. 
• Records of loss of trade or business interruption. 

If you take steps to prevent further damage (for example, temporary repairs) keep records of those actions and any costs incurred. 

4. Record the impact on your business 

Keep practical, factual records of how the situation affects your business. 

This may include: 

• Loss of income during closure or reduced trading. 
• Staff wages paid when your staff cannot work as usual. 
• Cancelled bookings or contracts. 
• Additional operating costs (for example, relocation, storage or security). 

This information can support insurance claims, rent relief requests and negotiations with your landlord. Keep a timeline of events, copies of correspondence, photos of damage and records of lost trade. Landlords and insurers may challenge claims that are not supported by evidence, so accurate and consistent records are important.

5. Reduce further loss where possible 

Most leases and insurance policies require tenants to take reasonable steps to mitigate loss. What is reasonable will depend on the nature of the damage, safety considerations and the type of business you operate. 

Acting early and keeping clear records is critical. After notifying your landlord or managing agent in writing, you may be able to take some of the following steps.

Move operations where possible 

Where it is possible, you might be able to continue trading in an alternative way, such as operating from a temporary location (even partially), trading online, delivering products or offering mobile services or using alternative premises or a shared workspace. Even partial trading can demonstrate that you’ve tried to reduce your losses. 

Protect stock, equipment and records 

If it is safe and reasonable to do so, you may be able to remove stock, equipment or business records from damaged premises to prevent further loss. Before removing anything, take clear photographs and keep records of what is moved, when and why. 

Follow reasonable repair instructions 

If your landlord proposes temporary access, repairs or a workaround that would allow for partial trading, consider these proposals carefully. Unreasonably refusing practical solutions may affect rent relief discussions or insurance outcomes. 

Use business interruption insurance (if applicable) 

If you have business interruption insurance, notify your insurer promptly, as policies often require immediate notice. Keep clear records of disruption, turnover, expenses and any steps taken to mitigate loss to support your claim. 

Take reasonable temporary measures 

You may take limited steps to prevent further damage or loss, such as engage an electrician to isolate unsafe wiring, arranging temporary barriers, or using signage to redirect customers. You are not generally required to fund permanent repairs unless you caused the damage, but reasonable temporary measures can help limit further loss. 

Implement basic continuity planning 

Even simple continuity measures can help demonstrate that you have attempted to manage the impact on your business. This may include keeping copies of important documents, customer records and supplier information, and planning short term alternatives for trading or service delivery.