Fire Safety Compliance Guide for                     Commercial Property Owners

In Victoria, fire safety compliance is a legal requirement for commercial property owners. Whether you own a single commercial property or manage a large portfolio, understanding Essential Safety Measures (ESMs), tenant obligations, and your compliance risks is crucial for ensuring regulatory compliance, avoiding penalties, and protecting your property’s value.

This guide will help you understand:

• Your fire safety obligations as a commercial property owner
• What responsibilities can be passed to tenants
• How to ensure tenants are meeting their ESM maintenance requirements
• The role of an independent auditor in protecting your compliance & investment

Essential Safety Measures (ESMs) are fire and life safety systems required in commercial buildings to protect occupants in an emergency. They include:

✔ Fire detection & alarm systems
✔ Sprinkler systems
✔ Emergency lighting & exit signs
✔ Fire extinguishers
✔ Smoke control & ventilation systems
✔ Fire doors & passive fire protection

The Building Regulations 2018 (Victoria) require all building owners to ensure these systems are regularly maintained and functional.

As the owner of a commercial property, you are legally responsible for:

✔ Ensuring all ESMs are maintained according to Australian Standards & local regulations
✔ Preparing & signing the Annual Essential Safety Measures Report (AESMR) each year
✔ Keeping records of maintenance, inspections & defect rectifications
✔ Ensuring tenants comply with their fire safety obligations (if applicable)

Failure to comply can result in:
❌ Significant fines & penalties under the Building Act 1993
❌ Voided insurance claims in the event of a fire
❌ Liability exposure for injuries, deaths, or property loss due to non-compliance

Under the Retail Leases Amendment Act 2020 (Victoria), commercial landlords CAN pass on the cost of ESM maintenance and inspections to tenants if it is clearly stated in the lease agreement.

Tenants may be responsible for:
✔ Routine maintenance & servicing of ESMs within their leased premises
✔ Ensuring fire equipment inside their unit is tested & functional
✔ Keeping emergency exits clear and unobstructed
✔ Hiring qualified service providers for fire safety inspections

However, the legal obligation to ensure compliance still rests with the property owner. If a tenant fails to maintain their fire safety obligations, the owner can still be held accountable.

Many commercial lease agreements require tenants to handle the servicing of ESMs within their leased premises. However, landlords & Owners Corporations must ensure that tenants are actually fulfilling their obligations—this is where an independent auditor plays a crucial role.

An independent auditor ensures:
✔ All tenants are maintaining their ESMs properly & in accordance with regulations
✔ The AESMR is completed on time each year, reducing compliance risks
✔ A single, consolidated audit report for the entire building, simplifying compliance management
✔ Building owners are protected from liability if a tenant fails to maintain fire safety equipment (or worse, significant building damage)

The cost of an independent audit should be passed onto the tenant as part of their lease obligations—this ensures the building owner is covered without absorbing the cost.

Pro Tip: To ensure fire safety compliance is taken seriously, lease agreements should include a clause stating that:

✔ Failure to maintain ESMs constitutes a breach of lease
✔ Non-compliance triggers immediate rectification requirements
✔ Repeated failures allow the landlord to intervene & recover costs from the tenant

Fire safety compliance isn’t just a regulatory obligation—it’s a critical part of protecting your property, tenants, and investment.

Key Takeaways:
✔ Owners remain legally responsible for fire safety compliance even when tenants maintain their own ESMs
✔ ESM maintenance costs can be passed to tenants under Victorian lease laws
✔ An independent auditor protects owners by ensuring compliance & avoiding risk
✔ Lease agreements should include fire safety compliance as a condition to avoid disputes