Landlords May be Liable for a Tenant’s Failure to Comply with Planning Laws

Landlords May be Liable for a Tenant’s Failure to Comply with Planning Laws

A recent decision in the Victorian Civil and Administrative Tribunal, Hume CC v Ecotec Woodwaste Pty Ltd [2015] VCAT 599 (“Hume”) has again highlighted the strict liability application of section 126 of the Planning and Environment Act 1987 (Vic) against the owner of land even though the offence was caused by a lawful occupier of the land.

The decision involved the granting of enforcement orders against both the tenant (and associated parties) and the landlord for breaches of the local planning scheme arising from the use of the property by the tenant for a “materials recycling” facility without a planning permit. The tenant had been dumping building material waste on the land in piles up to and exceeding 10 metres high.

The Tribunal found that a permit was required for ‘Materials Recycling’.  As one had not been obtained the Tribunal ordered all material deposited on the land was required to be removed and the land restored to its original condition.

The landlord argued it had relied on representations by the tenant that the activities did not require a planning permit. The landlord also argued it had taken appropriate action to serve a ‘notice of default’ under the lease and that it would be put to significant cost to clean up the land at the end of the lease if the tenant did not do so.

The Tribunal dismissed the landlord’s arguments and included the landlord in enforcement orders noting that “a prudent landlord should if necessary take strong and decisive steps early in the negotiations with the occupier, with a view to reaching an appropriate outcome before the situation gets out of control” At the time of writing Hume City Council has filed the Tribunal’s orders in the Supreme Court of Victoria. This means that further orders could be sought against the landlord, including forfeiture of the land (and other assets if required) to the Council to cover the Council’s costs of clean up.

In Victoria, as in many jurisdictions in Australia, the planning legislation is regarded as regulatory in nature so liability for offences is often considered strict or absolute. So a landlord can be guilty of a planning offence on their land even if the offence was caused by the default or negligence of the tenant.
A landlord in Victoria could also be in breach of the:

  • Environment Protection Act 1970 (Vic) for offences relating to discharge of industrial waste or pollution of land; and
  • Country Fire Authority Act 1958 (Vic) if a fire prevention notice is served and is not complied with.

Similar legislation applies in other states.

What should landlords do?

  • Ensure when entering into a lease that the tenant’s intended use either complies with any relevant local planning scheme requirements or that there are appropriate mechanisms for the tenant to provide evidence of compliance with the relevant planning requirements (and a letter on Council letterhead advising what is proposed is ‘ok’ or doesn’t need a permit, may not be legally sufficient). before taking occupation;
  • Actively monitor the tenant’s use of the land to ensure the tenant is not carrying out any activity that could breach the applicable planning scheme, environmental protection legislation or is unlawful.