By Chris Ringham 05 Apr, 2019 0 Comments

Commercial Leases: What Is The Landlord's Responsibility?

Commercial leases - what is the landlord's responsibility

Before undertaking a new commercial property lease, it is important to pore over the finer details regarding maintenance obligations. While domestic tenancy agreements typically place the lion’s share of responsibility onto the landlord to ensure the property is maintained to an acceptable standard, commercial leases generally work a bit differently. Under a commercial lease, the tenant usually has much more responsibility over the maintenance of the building.

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For example, the Landlord and Tenant Act (1985) stipulates that landlords must keep their properties in a “good state of repair” – but this only applies in domestic circumstances. With commercial premises, it is a legal requirement for the tenant – not the landlord – to carry out health and safety risk assessments as per the Health and Safety at Work Act (1974). The tenant will also be liable for any costs incurred as a result of carrying out these assessments, such as purchasing fire extinguishers, managing asbestos and other dangerous materials, and providing comfortable and safe working conditions for employees.

Gas safety also falls under the remit of the tenant. Again, this is something that the landlord is responsible for in domestic properties, but commercial leases generally stipulate that the tenant is responsible for arranging annual inspections courtesy of a Gas Safe-registered engineer. The tenant should also keep a record of all gas safety checks for at least two years. Failure to adhere to Gas Safe regulations could result in a fine, or even imprisonment in serious cases.

Grey Area

If you find yourself asking the question “what is a landlord responsible for in a commercial lease?”, you might be disappointed to discover that the answer is actually a bit of a grey area in terms of legislation. Most commercial property rentals are classed as FRI (Fully Repairing and Insuring) leases. FRI leases hold the tenant completely responsible for all insurance and maintenance costs from the beginning of the lease. Under an FRI lease, the tenant takes responsibility to ensure the building is compliant with health and safety legislation and building regulations.

However, commercial landlords are not completely absolved of maintenance responsibility. In buildings with multiple tenants (such as an office block housing several businesses), commercial landlords are responsible for maintaining all common areas (such as kitchens or break rooms). In some circumstances, commercial landlords may also be responsible for maintaining the exterior of the property. Other safety aspects, such as electrical wiring, are also the responsibility of the commercial landlord.

Help & Advice

Before acquiring any commercial leases, it is a good idea to consult a legal team to advise both parties of the exact terms of the contract in plain English. This ensures that no confusion arises over who is responsible for each particular facet of property maintenance in the future and means that both the tenant and landlord are justly represented. A specialist business law firm, such as Bowsers, could help immensely when it comes to understanding the minutiae of contract law surrounding commercial leases.

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