• Wendy Thomson

Capital P & E Maintenance on Commercial Investment Property

Updated: Feb 8, 2021

The weather conditions from extreme heat to heavy rain in many regional and metropolitan areas over the recent months has created a number of challenges for most property management teams with a high level air conditioning breakdowns and unit replacements, mainly due to aging buildings and aging plant and equipment.

There have also been challenges for landlords and property investors who may not have had a capital maintenance plan in place or plant and equipment breakdown insurance to cover these possibly unexpected major repair or replacement expenses.

Under most lease terms and conditions particularly Retail Lease Act 2003 provisions the obligation is on a landlord to provide working air conditioning to a premises available generally for 24 hours 7 days a week. Any down time without working air conditioning or heating may have serious cost and/or legal implications for the property owner.

From a commercial property management perspective having in place preventative maintenance contracts for all air conditioning units as per air conditioning contractors or manufacturers recommendations and in line with the relevant Australian Standards is imperative for ongoing building compliance.  Reliable, licensed insurance and reasonable priced contractors are critical to quick turnaround times.

From a risk management perspective we would recommend all commercial property owners review their investment from a capital structural view, plus review the age and condition of the plant and equipment on their valuable investments. Having a plan in place for any investment to maintain the building structure or replace plant and equipment when it has reached its useful age would potentially save future unexpected costs or legal and monetary risks on breach of lease terms.

Commercial property managers need to have instructions from their landlord clients in relation to urgent and non-urgent maintenance then work with their preferred contractors to discuss options for any future replacement or ongoing preventative maintenance.

© Wendy Thomson 2018