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Under the current Health and Safety in Employment Act 1992, commercial landlords owe health and safety duties where they own a building which is used as a workplace. These duties apply whether the building is used for their own business or leased to another employer. There are further duties for owners of any type of leased property when their employees are on site (e.g. repairing issues or installing new fixtures).
The new Health and Safety at Work Act comes into force in April 2016. This legislation will add a number of new features to the health and safety landscape, which landlords will need to consider.
The new Act has a broader definition of who owes the primary duty from just “employers” to “Persons Conducting a Business or Undertaking (PCBUs)”. A landlord investing in and owning/leasing properties will almost certainly be a PCBU, whether it has employees or not. This means that a landlord must ensure, so far as is reasonably practicable, the health and safety of its workers (this includes subcontractors carrying out repairs / maintenance) and people who may be put at risk as a result of leasing a property. There are now prescriptive steps which a PCBU has to follow to comply with this duty.
There are also further duties for PCBUs who manage or control a workplace, or control, install or supply fittings, fixtures or plant at that workplace. If you own a commercial building that is being leased with fixtures/fit-out already in place then you will owe duties in respect of those items.
What about my tenants?
A landlord cannot contract out of its health and safety duties, but that does not mean that the tenant has no duties at all. The new Act is clear that more than one PCBU can owe the same duty at the same time. Further, the Act specifies that both the landlord and the tenant have to consult and cooperate with each other in respect of that duty.
It is important to note that a PCBU only owes a duty to the extent that it has the ability to influence or control that matter. For a commercial tenancy, landlords will likely avoid duties in respect of most day-to-day operation of the tenant’s business. However, there are a few easy steps landlords can take to ensure they comply with their duties.
What can I do?
The best starting point is to have a comprehensive health and safety programme for each building you own, which sets up a process to ensure compliance (with a minimum of administration time and cost). This programme should cover the risks and hazards involved with employees/contractors who manage or repair the property, and general property risks like unfenced cliffs or ponds, earthquake risks or other maintenance issues.
We also recommend including a good health and safety clause in your leases. This clause will enable you to take all the steps necessary to comply with your duties, including gathering important information from your tenants and defining what matters the tenant agrees to cover. A good example is a faulty fitting or fixture causing a hazard. The lease may provide that the tenant has to pay for the repair, but the landlord should ensure that the tenant takes those steps promptly to mitigate the risk of the fault.
We suggest that commercial landlords ask for a copy of their tenant’s health and safety programme and arrange for regular reporting. This is to ensure that the tenant is taking appropriate steps to reduce risks and hazards, particularly in relation to the building and its fixtures.
The senior management of the landlord (or the person in control if not a company) has new due diligence duties. These duties require periodic consideration of specific issues and should be clearly documented. We recommend that senior people take specific advice on this duty as it cannot be delegated to others.
The information contained in this publication is of a general nature and is not intended as legal advice. It is important that you seek legal advice that is specific to your circumstances.
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