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.
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 (the Act), and in particular the Dangerous Goods (Storage and Handling) Regulations 2022 (the Regulations), 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:
- is the owner of the premises
- exercises control at the premises under a mortgage, lease or franchise, or
- 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.
Changes to the Storage and Handling notification requirements
The Regulations now require occupiers with prescribed quantities of dangerous goods to notify to WorkSafe:
- within two years of the most recent notification under the Regulations, and
- within three business days after changes that require notification (see below).
Changes that require notification to WorkSafe within three business days include:
- a significant change in the quantity or type of dangerous goods, including:
- if the maximum quantity of dangerous goods changes by 20% or more
- if there is a decrease in the notifiable goods by 20% or more, but which has not fallen below the relevant manifest quantity specified Schedule 2 of the Regulations
- if the notifiable goods fall below the relevant manifest quantity specified in Schedule 2 of the Regulations
- changes to the occupier’s name or contact details
- if there is a new premises where the notifiable goods are stored or handled
- changes to the nature of the principal activities involving the notifiable goods at the premises
- new plant has been introduced to the premises for use in connection with the storage and handling of the notifiable goods
- when substantial modifications are made to plant used for the storage and handling of the notifiable goods at the premises
Note: there are other regulations that duty holder must comply with, for further details please see the Code of practice for the storage and handling of dangerous goods.
Risks for landlords and property owners
Under the definition of occupier, property owners can have 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, 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 the landlord or property owner must play in ensuring the property is fit for purpose
If tenants abandon the property landlords or property owners 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, to be disposed of after a tenant has vacated the property, WorkSafe recommends landlords and property owners:
- ensure due diligence is done before purchasing a property
- understand the nature of business being conducted in their premises
- conduct regular inspections of the premises
- ensure there are clear contract requirements for tenants
- ensure the premises have planning approval from the local council for the quantities of dangerous goods stored and handled at the premises
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.