Essential safety measures: who should pay for them

From 23 September 2020 a landlord under a retail lease can pass on the costs of repairing and maintaining essential safety measures (ESM), and the costs of installing ESM as part of a fit-out, to their tenant as outgoings, though only where the tenant’s lease and disclosure statement or annual estimate of outgoings enables them to do so.

ESM include smoke detectors, sprinkler systems, fire extinguishers, fire exit signs and annual safety inspections.

These changes apply to new and existing leases, though don’t enable a landlord to recover ESM costs that they have already paid.

A tenant can now also agree to carry out repairs and maintenance works to an ESM.

The changes apply as a result of the Retail Leases Amendment Act 2020, which amends the Retail Leases Act 2003.


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