Sam is a financial planner who leases out premises on the second floor of a two-storey commercial building in the CBD of Brisbane. He has a standard commercial lease agreement in place for 3 years with two 3-year options if he wants to renew the lease in the future. The premises have an old split system air conditioner and heating system. The system works, but it is not powerful enough to cool the entire floor. Sam complained to the managing agent about it. The agent said that the landlord (Tim) does not have to upgrade the system if it still works and is not a hazard. Sam was frustrated with this response as he wanted a nice cool environment in the office, so he took it upon himself to install a new split system. He disposed of the old one. The staff working in the premises were happy about the new system being installed. This is because the Brisbane summers can get very hot. Then one day the system started emitting smoke. Sam called in a repair man. This was a different man to the one that installed the system originally. The repair man said that the system was not installed properly in the first place. Secondly, there was asbestos in the walls and the roof near the system that did not appear to be sealed properly. Sam has no idea whether the exposure of the asbestos occurred before or after the installation of the new unit. He asks the repair man how much it will cost to repair everything safely. He said $30,000 due to the asbestos clean-up. Sam does not want to pay this. He calls the agent and says that the building has asbestos and is a hazard. He demands that this be cleaned up immediately or else he will not pay rent for 6 months. Sam is already in arrears of rent by 2 months. He wanted to use this opportunity to try and get out of paying the two months' rent in arrears. The agent sends his own repair man to investigate the situation. The agent advises Sam that the asbestos was concealed and not a hazard until recently when the new system was installed. The agent says that, as a result, the landlord is not responsible for the cost of the clean-up.

Sam and the agent cannot come to an agreement about who will pay for the clean-up and repair of the asbestos. Advise Sam as to his obligations. Also advise Sam what can happen if he does not pay the rent he owes. Sam wants to stay in the premises. ( do not have to discuss the Retail Shop Leases Act 1994 (Qld) )