Recovery of the cost of essential safety measures and s 251 of the Building Act

A recent journal article has suggested that landlords cannot recover as an outgoing the cost of complying with essential safety measures under the Building Act.

Essential safety measures overlap with a significant number of repair and maintenance costs that may otherwise be recoverable by a landlord under the terms of a lease.

This has lead to an increasing number of inquiries in recent weeks and seems to be causing singificant consternation in the leasing and property management community.

I am not able to comment publicly on the merits of the arguments in the article at this stage.

However, given the level of interest that the article has generated, readers may be interested in the following material to assist them in forming their own view on the issues:

• Norman Mermelstein and (the late) Michael Redfern, ‘Tenants beware: Don’t get hit by safety maintenance costs‘, 86(04) Law Institute Journal 28 (this is the article referred to above, a copy of which is publicly available here);
• Robert Hay has two blog posts on the topic, copies of which are available here and here;  and
• the main decision referred to in the article is Chen v Panmure Hotel Pty Ltd [2007] VCAT 2464, a copy of which is available here.

The article and Robert’s posts also raise issues relating to the landlord’s ability to recover as an outgoing the costs of repair and maintenance obligations under s 52 of the RLA and the VCAT decision in Cafe Dansk v Shiel [2009] VCAT 36. My comments on that decision are available here.

Readers should be aware of this issue and should expect to read more about this topic in the coming months.