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Ramifications of Earthquake Prone Buildings

It is not only in Christchurch that local authorities are coming under renewed pressure to identify and address the issue of earthquake-prone buildings. These efforts by local authorities, however, are having ramifications not only in terms of expense for building owners and inconvenience for tenants, but also in terms of the relationships between landlords, tenant employers, and employees. While health and safety obligations are largely outside the realm of most forms of lease, there are implications when a tenanted building is registered as earthquake prone or potentially earthquake prone.

Obligations of Tenant Employer

Most leases require a tenant to comply with the provisions of all statutes, ordinances, regulations and by-laws relating to the use of the premises by the tenant. Most leases also, however, provide that the tenant does not have obligations to make any structural repairs or improvements, especially when those structural repairs or improvements are necessary through no fault of the tenant. These obligations are on the Landlord, even when structural repairs or improvements are required due to a law, bylaw or change of other compliance issue. Nevertheless, a tenant employer has obligations outside of the four corners of the lease document. In particular, employers are required to, “take all practicable steps to ensure the safety of employees while at work”. The Health and Safety in Employment Act 1992 (the “Act”) obliges employers to provide and maintain a safe working environment for their employees. While there is no case law confirming this position under the Act, it seems likely that tenant employers are subject to obligations only their landlord can protect against.

Obligations of Landlord

As well as having sole responsibility for structural repairs, a landlord is also responsible for taking all practicable steps to ensure that no hazard harms people in the premises or in the vicinity of the premises let to a tenant.

Mitigating Liability

Given landlords’ and tenant employers’ obligations under the Act, it would be sensible for each to work collaboratively with the other to achieve the structural repairs necessary to remove the premises’ status of earthquake prone or potentially earthquake prone. Flexibility regarding access to tenanted premises may be necessary.

Disclaimer: This article relates to the clause in the fifth edition ADLS lease. Your lease may be different.