Leasing property for the storage of dangerous goods

Information for landlords and property owners leasing to tenants who are using the property for the storage and handling of dangerous goods (DG).

Risks with dangerous goods

Dangerous goods are substances with hazardous properties that can harm people and property. They may be, for example: corrosive, flammable or explosive.

Dangerous Goods Act and Regulations

To help control the risks posed by these materials, the Dangerous Goods Act 1985, and in particular the Dangerous Goods (Storage and Handling) Regulations 2012, place obligations on the occupiers of premises used for the storage and handling of dangerous goods, such as requirements for:

  • installation, testing and maintenance of fire systems appropriate to the nature and quantity of dangerous goods
  • control of ignition sources
  • provision of spill containment
  • proper segregation of incompatible dangerous goods
  • preparation of an emergency plan
  • a manifest of the dangerous goods
  • installation of placarding

    Under the Act, an occupier is defined as a person who:

    1. is the owner of the premises
    2. exercises control at the premises under a mortgage, lease or franchise, or
    3. is normally or occasionally in charge of or exercising control or supervision at the premises as a manager or employee or in any other capacity

    Ultimately the purpose of the Act and Regulations is to ensure that risks from the storage and handling of dangerous goods are appropriately controlled.

    If tenants are not meeting their obligations then there is greater chance of injury to employees at the facility and property damage.

    Risks for landlords and property owners

    Under the definition of occupier, property owners can be shouldered with obligations under the Act should a tenant vacate and leave dangerous goods on the property.

    From this perspective, it is important that landlords understand whether tenants are meeting their regulatory obligations or risk:

    • being left with the costs of disposal for dangerous goods, or
      • having to rectify deficiencies in control measures to meet the requirements of the regulations

        Important considerations for landlords and property owners

        Depending on the lease agreement, tenants may require support from property owners to ensure that the property is fit for storing and handling dangerous goods. If the tenant is unable to meet their duties under the Act and Regulations then they may not be able to continue operating out of that premises. As such, when dealing with dangerous goods it is important for landlords and property owners to understand:

        • what use the property is suitable for
          • what tenants are planning to use it for
            • what ongoing role you must play in ensuring the property is fit for purpose

              If your tenants abandon your property you may be exposed to other factors, such as loss of rent, clean-up expenses and, if damage has occurred, your insurance may not cover you.

              Landlords may also face prosecution and have obligations under other legislation such as planning and building requirements.

              Risk controls for landlords and property owners

              In order to reduce the risk of being left with dangerous goods that you will need to dispose of after your tenant has vacated the property, WorkSafe recommends that landlords and property owners:

              • ensure due diligence is done before purchasing a property
                • understanding the nature of business being conducted in their premises
                  • conduct regular inspections of the premises
                    • ensure there are clear contract requirements for tenants

                      In addition, it is important that property owners and tenants should have clear arrangements in place for the testing and maintenance of a facility's fire system, including timely rectification of faults.