It is a common point of contention in commercial and retail leases as to who is responsible for the installation, replacement and/or repair of necessary fire safety fittings and fixtures in the tenanted premises, writes commercial lawyer DEAN FRITH.
It is generally understood in the property industry that these obligations fall to the tenant, but landlords should be aware that this is not always the case, and should check their leases carefully.
There are a number of fire safety measures that must be maintained in all commercial properties, with local councils having the authority to close business premises that do not comply with the requirements of the Regulations. The laws are outlined under the Environmental Planning & Assessment Regulations (2000).
Court decision citing circumstances when the landlord may be responsible
A recent Supreme Court decision found that the landlord was responsible for carrying out building works directly related to the fire safety and fire resistant condition of the premises in question. The language of the commercial lease was critical in the Court’s decision.
The lease contained a clause commonly found in commercial leases, which stated that the tenant was to make all repairs and amendments required by any local council or other relevant authority, including compliance with any fire notice or order. The lease also made provision for any work “of a structural nature” to be the responsibility of the landlord, with a specific carve-out releasing the tenant from undertaking any work of that nature.
The council issued a notice to the tenant, requiring certain fire safety works to be carried out, in order to ensure the building complied with the Regulations, failing which the tenant would be ordered to cease conducting its business from the premises.
The tenant forwarded the notice to the landlord and requested that the works be carried out as a matter of urgency.
The landlord argued that the tenant was required to carry out the necessary works, pursuant to its obligation to make fire safety repairs required by the local council.
The tenant argued, however, that the amount of work required was such that it would change the structural quality of the building, and therefore responsibility for its completion fell to the landlord.
The Court held that the term “of a structural nature” was very broad and open to interpretation according to the particular facts of a matter. Ultimately, it decided that whether works are of a structural nature is a matter of fact and degree.
In this case, it was found that compliance with the fire safety standards depended upon the combined effect of completion of the various items required under the notice. Further, the Court held that performance of the works would change the condition of the building from unsafe to safe, and that the works therefore required the making of amendments and alterations of a structural nature.
Practical implications for landlords and tenants
It is generally important for tenants and landlords to understand the types of work likely to be considered structural or of a structural nature. In respect to fire safety measures specifically, each party should ensure they are clear about their obligations under their lease.
For landlords looking to shift responsibility for fire safety measures to their tenants, it is still possible to do so, but the lease needs to be appropriately drafted in light of the most recent case law in this area.