Who is responsible for fire safety in a commercial lease?

Fire safety is an area that has caused some contention in retail/commercial leases, particularly in terms of which party bears the responsibility to take care of installation, replacement and repair work.

Landlord or Tenant?

Ordinarily the tenant would be responsible for taking care of their own fire safety, however, this is not always the case, and it is very important for landlords to engage a lawyer to conduct a lease review if they are not entirely sure.

If you run a commercial property, you are required to adhere to certain fire safety regulations. Failure to do so can result in the council being authorised to close down any non-compliant businesses. These obligations are enacted in the Environmental Planning & Assessment Regulations (2000).

Case Law

In a recent Supreme Court case, it was the landlord who was responsible (and guilty of negligence) for failing to carry out building works whose purpose was directly related to fire safety, namely that the residence was, in fact, sufficiently fire resistant. The wording in the lease agreement of the provision relating to fire safety was pivotal in the Court’s determination.

The lease contained a fairly standard clause that makes any repair work and amendments the responsibility of the tenant, specifically in circumstances where such work is required by the local council or relevant authority. It mentioned fire notices/orders as an example of the type of repair work and amendments that the tenant may be required to carry out from time to time. Importantly, the lease also contained a clause that made any structural work the responsibility of the landlord, and included a carve-out provision that discharged the tenant from having responsibility over such work.

The tenant received a notice from the council that required the tenant or landlord to carry out certain fire safety repair work to comply with regulatory standards. The council threatened to shut the business if the works were not carried out. The tenant sent the landlord the notice and requested the work be carried out as soon as possible. The landlord relied on the provision in the lease relating to fire safety being the tenant’s responsibility, and refused to carry out the works. The tenant argued that the extent of the repair works meant that the structure of the building would be affected, which would make the works the landlord’s responsibility. The Courts decided that the question of whether the works were ‘structural in nature’ was one of degree, and concluded that the works would convert the condition of the building from unsafe to safe. This meant that the works were structural in nature, and therefore the responsibility of the landlord.

Conclusion

It is very important, as a tenant, to understand what is considered ‘structural’ when it comes to repair work, as this will affect which party, landlord or tenant, bears the responsibility of certain fire safety repair works. If you’re a landlord looking to avoid liability in relation to these types of works, you will need to have your lease agreement reviewed and amended in the appropriate provisions. If you need a commercial lease review and you would like a fixed-fee quote, contact LegalVision on 1300 544 755.