Fire safety in leased commercial properties

Posted on Mar 13, 2018 by Dean Frith   |   Categories: Commercial & Retailing Leasing

It is a common point of contention in commercial and retail leases as to who is responsible for the installation, replacement, maintenance and/or repair of necessary fire safety fittings and fixtures in the tenanted premises.

There are a number of fire safety measures that must be maintained in all commercial properties (for example: smoke detectors, fire extinguishers, emergency lighting, exit signs etc.), with local councils having the authority to close business premises that do not comply with the requirements of the Regulations. The laws in New South Wales are outlined under the Environmental Planning & Assessment Regulations 2000.

Ultimately the obligations and legal responsibility under the Regulations sit with the owner of the property, but it is often the case that under the terms of the lease, the owner (or landlord under the lease) shifts both responsibility and the cost for attending to fire safety measures to the tenant.

There has been a number of cases where breaches of the Regulations have been identified by the authorities and a dispute has arisen between landlord and tenant as to who is responsible, as the terms of the lease were ambiguous. Therefore, it is vital for the lease to clearly set out who is responsible for what, so as to avoid uncertainty and so that the parties are aware of what is required prior to entering into the lease.

Where there are terms in a lease shifting the burden to the tenant it is also important for the tenant to make sure that they are aware of what that responsibility will entail and what it will cost annually. Prior to entering into the lease obtaining a report from a suitably qualified professional as to the current state of compliance is a prudent first step.

Finally, it is imperative that landlords appreciate that while the terms of the lease may require their tenant to ensure the property is compliant with the fire safety Regulations this does not mean that they are not still ultimately liable. Landlords have a potential contractual claim against their tenant if they fail to meet their obligations, but the authorities will be still seek recourse against the landlord under the Regulations if there is any breach.

Fire safety is a vital aspect of any tenancy and it is in the interests of both owners and tenants that it be front of mind when negotiating the terms of a new lease and then throughout the terms of the lease. Where parties are uncertain of their rights and obligations legal advice should be sought.