Repainting clauses in leases challenged at VCAT

Recent decisions at the Victorian Civil and Administrative Tribunal (VCAT) have highlighted that repainting clauses in commercial and retail leases are not automatically enforceable. Instead, their application depends on the specific wording of the lease, the structure of lease terms, and the factual circumstances surrounding each tenancy.

Separate leases vs continuous terms

In Borg v Romanos (Building and Property) [2025] VCAT 867, the Tribunal considered whether a tenant was required to repaint premises at the end of their occupancy.

The lease arrangement consisted of:

• An initial four-year term with a four-year option;
• A subsequent lease for a further four-year term with an option, but on different conditions.

At the end of the second lease, the landlord sought to enforce a standard repainting clause (Clause 3.3.1 of the Law Institute of Victoria lease), which requires tenants to repaint every five years, treating the term as one continuous period.

However, VCAT found in favour of the tenant. The Tribunal determined that:

• The two leases were separate agreements, not a continuous term; and
• Neither lease individually reached the five-year threshold required to trigger the repainting obligation.

Further details

This case reinforces that landlords cannot assume lease periods will be aggregated unless clearly structured and documented as a continuous term.

Importance of condition reports

A key takeaway from this decision is the importance of comprehensive condition reports. VCAT strongly indicated that condition reports should be prepared:

• At the commencement of the original lease; and
• At the start of any subsequent lease or renewed term.

This provides a clear benchmark for assessing the condition of the premises and helps avoid disputes at lease expiry.

When repainting clauses can be enforced

A different outcome was reached in Deng and Deng Pty Ltd v McPhee and Anor (Building and Property) [2024] VCAT 1025.

In this case:

• The lease included a non-standard repainting clause, requiring repainting every three years internally and every five years externally;
• The tenant argued that such obligations fell under the landlord’s responsibility pursuant to Section 52 of the Retail Leases Act 2003 (Vic).

VCAT rejected the tenant’s argument and upheld the landlord’s position, finding that:

• Section 52 did not override the specific repainting obligations agreed in the lease; and
• The clause was enforceable due to its clear and specific timing requirements.

Further details

The Tribunal also emphasised that repainting clauses should be drafted with precision, for example:

Internally every three (3) years and externally every five (5) years, commencing from the start of the initial term.

Key takeaways for landlords and tenants

These decisions provide important guidance for both landlords and tenants:

• Clarity is critical: Repainting clauses should clearly define timing and obligations.
• Lease structure matters: Separate leases may not be treated as a continuous term unless explicitly stated.
• Condition reports are essential: They provide protection and clarity at both commencement and expiry.
• Notwithstanding the overriding legislation, well-drafted repainting clauses can still be enforceable.

Need advice?

If you would like to discuss how these rulings may impact your lease or investment, please don’t hesitate to contact our property management team.