by Tim Smithers
Compliance with fire precautions legislation can be an expensive business and it is an area which tenants and landlords alike should consider with great care before taking a lease or investing in property. This article examines the legislative requirements which apply to factories, offices and shops and the division of responsibilities between landlords and tenants.
Designated use
The Fire Precautions Act 1971 (“the 1971 Act”) — which has been amended by the Fire Safety and Safety of Places of Sport Act 1987 (“the 1987 Act”) — provides that all premises which are put to a “designated use” (as prescribed by the Secretary of State) require a fire certificate[1] .
The Fire Precautions (Factories, Offices, Shops and Railway Premises) Order 1989[2] identifies factories, offices and shop premises as “designated uses” requiring a fire certificate where:
more than 20 persons are at work[3] at any one time; or
more than 10 persons are at work at any one time elsewhere than on the ground floor of the building.
For buildings in multiple occupation containing two or more sets of premises a fire certificate is required where the aggregate of persons at work at any one time in both or all sets of premises exceeds these same totals.
A fire certificate is also required (regardless of the numbers of persons at work) where explosive or highly flammable materials are stored or used in or under the premises (except where the fire authority determines that there is a minimal risk)[4] .
Power to grant exemption
The Secretary of State is empowered to specify categories of premises which, although being used for a “designated use” may be treated by the fire authority, after inspection, as constituting a low risk and accordingly exempt from the requirement to have a fire certificate[5] .
The 1989 regulations specify the following categories as being potentially exempt:
(1) In the case of factories or offices, where the premises consist of:
(a) the ground floor of a building; or
(b) the ground floor and basement of a building; or
(c) the ground floor and first floor of a building; or
(d) the ground floor, first floor and basement of a building in which the basement is separated from the ground floor by fire-resisting construction[6] .
(2) In the case of shops, where the premises consist of:
(a) the ground floor of a building; or
(b) the ground floor and basement of a building in which the basement is separated from the ground floor by fire-resisting construction[6] .
If a particular property falls within a specific category there is no automatic exemption — the fire authority is simply given a discretion to grant an exemption.
Application for fire certificate
The burden of compliance with all fire requirements is generally placed on the “occupier” — generally the tenant — except where the building is in multiple occupation where liability generally falls on the owner.
It is an offence to use premises for which a fire certificate is required unless there is an existing fire certificate or an application for a certificate has been made.
The onus is therefore placed on the occupier (or owner as the case may be) to apply for a fire certificate. Until the certificate is granted the occupier (owner) is under a duty to secure that:
the means of escape in case of fire can be safely and effectively used at all times when there are people in the premises;
the means of fighting fire are maintained in efficient working order;
that any persons employed to work in the premises receive instruction or training in what to do in case of fire.
If the fire authority are not satisfied about such matters they must serve a notice specifying what steps must be taken within a specified time. Although there is an appeals procedure, ultimately a failure to comply with the fire authority’s (or the court’s) requirements will make it unlawful to use the premises for the proposed use[8] .
General statutory duty
Factories, offices and shop premises which are not required to have a fire certificate are nevertheless subject to a general duty to provide such means of escape in case of fire and for fighting fire as may reasonably be required[9] .
The Secretary of State has issued a code of practice for the purpose of providing practical guidance on how to comply with this general duty[0] . Although the code does not have statutory force[11], the fact of non-compliance is evidence tending to show whether a contravention of the general duty has occurred.
If in the fire authority’s opinion premises do not comply with that general duty, they may serve an improvement notice on the occupier or owner. Again there is an appeals procedure, but ultimately a failure to comply with the fire authority’s (or the court’s) requirements is an offence.
Failure to comply with fire requirements is generally a criminal offence. The 1971 Act (as amended by the 1987 Act) identifies at least 21 offences which carry a fine and in some cases possible imprisonment. Moreover, in cases of serious risk, the fire authority may serve a “prohibition notice”[2] .
Contractual division of liability
As indicated earlier, the 1971 and 1987 Acts generally place the burden of compliance on the “occupier” — which will usually mean the tenant.
However, where there is a building in multiple occupation, liability generally falls on the “owner”, defined as the person who receives the rack rent of the premises (or would do so if the premises were let at a rack rent). It includes a person who is receiving rent as an agent or trustee.
In view of the potential cost of complying with requirements of the fire authority — and indeed the penalties for non-compliance — it is of the utmost importance, particularly with a multilet building, that any lease clearly stipulates the division of contractual liability between landlord and tenant. Indeed in the case of an agent managing premises it is equally important that he has a suitable indemnity from his landlord client.
Statutory compliance covenants
To afford himself the best protection the landlord should ensure that the tenant covenants to comply with all statutory requirements including fire requirements. If the demised premises comprise part only of the landlord’s building the service charge provision should ensure that the tenant is liable to contribute towards any expense incurred by the landlord in ensuring that the building as a whole complies with statutory requirements.
Depending on the length of the term of the proposed lease and the negotiating strengths of the parties, such a suggestion is likely to meet resistance from the tenant. He will be unwilling to invest substantial sums in premises from which he will only receive a short-term benefit.
In a multi-let building the tenant is likely to require a covenant from the landlord to comply with statutory requirements in respect of common parts (albeit that in most leases the cost will filter back through the service charge).
It should be borne in mind that it is not only a specific covenant to comply with statutory obligations that may impose a liability for fire requirements. Almost all leases contain a covenant in terms such as to “pay all existing and future taxes, rates, assessments, outgoings, impositions, demands etc”. It has been held that the expense of providing a fire escape falls within a tenant’s covenants to pay “all rates, assessments and demands”[3] .
As a drafting point, a tenant whose landlord makes a concession in connection with a specific statutory compliance covenant should also extend that concession to the “assessments outgoings impositions” etc covenant.
Covenants against alterations
The contractual position should also be considered in the context of future alterations to the demised premises. The landlord will need to satisfy himself — particularly if the premises comprise part of a multi-occupied building — that any proposed works will not contravene the fire requirements.
In the case of premises with a fire certificate, the fire authority must be notified in advance of any proposals to make a material extension or alteration to the premises (whether structural or internal). Although “material” is not defined, the wording of the 1971 Act indicates that it would include anything which renders inadequate the existing arrangements for escape, fire fighting and other precautions. Failure to comply with any additional requirements of the fire authority will result in cancellation of the certificate.
For premises which do not require a fire certificate, the general duties and code of practice will apply.
The situation may occasionally arise where the occupier (owner) is required to carry out works by the fire authority but has no contractual right to do so under the terms of the lease. There is then a possibility of a statutory variation of the contractual terms.
Statutory variation
The actual wording of the lease does not necessarily represent the final position of the parties.
Section 28 of the 1971 Act(14) provides for a possible modification of the contractual terms in the case of factory, office or shop premises. There are two limbs — apportionment of expenses and power to carry out the required works.
Apportionment
The provisions apply where an occupier (or in the case of a multi-occupied building, the owner) is required to carry out any structural or other alterations in order to comply with obligations in connection with a fire certificate or the general duty under section 9A of the 1971 Act. If the occupier (owner) alleges that the whole or part of the expense should be borne by another party, he may apply to the county court for a direction:
(a) as to whom should bear the expense and in what proportion; and
(b) for modification of the rent payable under any lease.
The court may make such order as it considers “just and equitable in the circumstances of the case”.
There is clearly ground for a landlord to challenge an inadequate service charge provision or for a tenant to seek to vary any onerous statutory compliance covenant.
In exercising its discretion, it is suggested that the court would be unwilling to vary contractual obligations where the expense clearly falls within the terms contemplated by the parties. Specific covenants which comply with the Fire Precautions Act are therefore less open to challenge than a general covenant to pay “all assessments, impositions, demands” etc.
However, even in the case of a specific covenant, it is suggested that a tenant may have grounds for claiming relief where the extent of works required were not in the contemplation of either party at the time the lease was granted — eg where the parties had contemplated the expense of fire-resistant doors, but the fire authority insists on the construction of an external fire escape[5] .
Alterations
Where an occupier (owner) is prevented from carrying out required works by reason of the terms of the lease, he may apply to the county court for an order setting aside or modifying such of the terms of the lease as the court considers just and equitable in the circumstances.
There is little guidance as to how the court will exercise its discretion but it is tentatively suggested that an appropriate yardstick might be the relative detriment to landlord and tenant of permitting or refusing an application. On this basis a tenant whose business faces closure because his landlord refuses to allow an alteration to the building might succeed — particularly if he could show that the alteration would be of no material detriment to the landlord.
Furthermore, the provisions of Part I of the Landlord and Tenant Act 1927 should not be overlooked. This enables a tenant of business premises to apply to the court for authority to carry out improvements, even though these may not be permitted under the terms of the lease. An improvement may be authorised by the court if it is satisfied that the improvement:
is of such a value as to be calculated to add to the letting value of the holding at the termination of the tenancy; and
is reasonable and suitable to the character of the premises; and
will not diminish the value of other property belonging to the landlord or any superior landlord[6] .
Summary
The impact of fire safety legislation requires careful consideration by landlords, tenants and their advisers, not only from the point of view of financial liability but also, of course, for the safety and welfare of their employees.
In any event, the statutory requirements cannot be treated in isolation from the parties’ contractual obligations under the lease, and the possibility (however slim) of varying the contractual terms by application to the court in appropriate situations.
References
[1] Section 1, Fire Precautions Act 1971
[2] SI 1989, No 76 which with effect from April 1 1989 revokes and replaces the Fire Precautions (Factories, Offices, Shops and Railway Premises) Order 1976, SI 1976, No 2009
[3] For interpretation of the phrase “persons at work” see Article 5(3) Fire Precautions (Factories etc) Order 1989, SI 1989, No 76
[4] See also Fire Certificates (Special Premises) Regulations 1976, SI 1976, No 2003
[5] Section 1, 1987 Act
[6] Construction is treated as fire resisting if it is of such a nature as to be capable of providing resistance to a fire for a period of not less than 30 minutes: Article 6(4) Fire Precautions (Factories etc) Order 1989, SI 1989, No 76
[7] 1971 Act, Schedule 2, as amended by 1987 Act, Schedule 1
[8] Section 5(4), 1971 Act
[9] Section 9A, 1971 Act as amended by section 5, 1987 Act
[0] Code of practice for fire precautions in factories, offices, shops and railway premises not required to have a fire certificate. HMSO 1989.
[1] cf The Fire Precaution (Non-certificated Factory, Office, Shop and Railway Premises) Regulations, SI 1976, No 2010, which have now been revoked by SI 1989, No 78
[2] Section 10, 1971 Act, as substituted by section 9, 1987 Act
[3] Shephard v Barber (1902) 1 LGR 157
[4] As amended by Schedule 2, para, which was added by the 1987 Act
[5] On the question of the court’s discretion, see further Woodfall’s Law of Landlord and Tenant, 28th ed paras 1-1341ff
[6] Section 3, Landlord and Tenant Act 1927
Tim Smithers is a partner in Bristol solicitors Veale Wasbrough.
