Q&As

Robert Cunningham on Indemnities, Insurance and Risk Sharing in Leases

Wednesday January 24, 2018

Robert Cunningham has more than 40 years' experience in corporate and commercial, banking and finance, and property law. His practice focuses on advising on unusual commercial arrangements and all aspects of contract and property law. He advises privately incorporated companies, not-for-profit, and public companies about corporate structures, governance, and equity raising. He has advised various companies on competition and consumer law including restrictive trade practices, mergers and acquisitions, and the consumer protection provisions. His clients include companies involved in the food, technological, environment, and manufacturing industries, a major church, charitable organisations and  educational institutions. Robert Cunningham

We had the pleasure of sitting down with Robert recently to discuss key challenges and opportunities facing the industry today.

You can find the full Q&A below.

Robert, how many years have you been practicing?

I have kept a close eye on developments in leasing law for more than 40 years of practice.

What are the main issues around risk allocation?

From what I can see, the big issues are the scattergun wording of indemnities and releases and the serious risk to tenants of being uninsured for certain risks.

You will be presenting the topic “Indemnities, Insurance and Risk Sharing in Leases” at the up and coming Retail and Commercial Leasing Conference in Brisbane. Can you tell us a little more about Indemnities in leasing?

A landlord can use various mechanisms to pass responsibility for some risks to the tenant.  One of these is the indemnity. The wording of indemnity clauses is infinitely varied. Often, one could write a short book on the full effects of the clause. While the tenant's eyes start to glaze when the effect is explained, it is nevertheless necessary for the tenant's lawyer to alert the tenant to all the risk allocation clauses in the lease.

What do you think is the big risk for tenants?

The tenant will be liable to the landlord for damage to the landlord's property arising from the tenant's negligence. In the case of fire destroying the building in which the leased premises are located, the tenant can be liable for the full loss. The tenant does not have the benefit of the landlord's building insurance unless there is agreement to that effect.

You can hear more from Robert at the Retail and Commercial Leasing Conference seminar, being held on Wednesday 21 March at the Mercure Hotel Brisbane, Brisbane.

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