Landlords cannot pass on the cost of essential safety measures such as fire extinguishers, exit signs, compliance reports and sprinklers in their Victorian buildings as outgoings to commercial tenants, a new legal opinion suggests. The finding will have significant implications for the way landlords structure lease agreements and may prompt tenants to try and recover costs already paid to landlords, experts say. Landlords are obliged to provide and maintain essential safety measures but frequently pass on the cost of complying as outgoings in tenants' lease agreements. Small business commissioner Geoff Browne brought the issue to a head after seeking a definitive opinion as a matter of public interest on whether landlords can legally pass on the costs of essential safety measures required under building laws. Mr Browne said his office had dealt with numerous disputes about the issue. "Last year we had over 1700 applications. About 60 per cent of those were relating to retail lease disputes. Of those around 25 per cent had to do with repairs and maintenance and a subset of that is often relating to essential safety measures," he said. The legal opinion was delivered by Victorian Civil and Administrative Tribunal president and Supreme Court justice Greg Garde last week. Justice Garde found landlords must bear the compliance costs of their essential safety measure obligations and cannot pass them on to their tenant. "Any term of the lease or of a contract which purports to require the tenant to perform the obligation is void, and any term which purports to require the tenant to pay the cost of performing the obligation is void," the opinion states. Landlords are able to reach an agreement with tenants where the tenant undertook the work to meet the requirements, but it had to be at the landlord's expense. Where landlords failed to provide essential safety measures, tenants may carry out the required work and recover the expense or deduct it from their rent, it stated. Marshalls + Dent Lawyers principal Jeffrey Pinch said there was potential for the opinion to apply to general commercial as well as retail tenants. It was "common" for leases to include essential safety measures in outgoings, sometimes amounting to thousands of dollars, particularly for smaller tenants less able to negotiate favourable lease terms, Mr Pinch said. "There's no doubt tenants who have been hit over the years ... will take it and go to landlords and seek recovery. I get the feeling the policy is now skewed too much in favour of tenants," he said. The legal opinion was advisory only and has not been tested in court but carries weight because it was delivered by VCAT's president. It cleared up a "vexed" issue for the property industry, Mr Browne said.