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What is a commercial landlord responsible for? That depends

Commercial landlords have certain responsibilities in relation to their rented property. However, the exact nature of these responsibilities can be difficult to decipher. The importance of the lease agreement in this regard cannot be understated. Although some duties rest with the landlord by law, much depends on the drafting of the individual lease agreement. Here, we go through some of the main responsibilities and how they are divided between the tenant and the landlord.

Maintenance and repairs

Tenant and landlord responsibilities for repairs/maintenance are detailed in the lease. Often, what is known as a ‘full repairing and insuring lease’ is used. This places the responsibility of keeping the premises in good repair throughout the term of the lease on the tenant. When the lease ends, the tenant must return the building to the state in which they received it. However, commercial landlords may still be responsible for some maintenance/repairing obligations. Occasionally (but not usually), landlords are responsible for structural repairs. If the premise is let to multiple tenants, then the maintenance of communal areas may still be with the landlord.

Insurance

Usually, costs of obtaining insurance will be passed to the tenant in commercial leases. However, commercial landlords will usually wish to arrange insurance themselves for several reasons, including:

  • choosing the insurer,
  • choosing the level of cover and,
  • obtaining cover for unoccupied commercial property.

Commercial landlords should take great care and consult experts when selecting an insurance policy.

Fire safety

Whoever has control over a premises is responsible for fire safety. This is usually the tenant in a commercial property if they are an employer.

It is important to note that a commercial landlord may in some limited circumstances still have some responsibilities concerning fire safety (again, depending on what is in the lease agreement; which will more usually place this responsibility on the tenant ). For example, the landlord may have to provide equipment such as fire extinguishers or similar items. Commercial landlords should also consider fire safety when completing risk assessments.

In a similar manner to the responsibility to maintain common areas of premises, commercial landlords may take on the responsibility for fire safety in any common areas of the building.

Gas and electricity safety

Gas

Responsibility for maintaining gas equipment and installations will be detailed in the lease and is normally placed on the tenant. This often includes arranging for annual inspections of the gas equipment. These are important obligations and, as such, it is crucial to ensure the responsibilities are attributed properly in the lease.

Electricity

Electrical safety of a leased premise starts off as the responsibility of the commercial landlord under law but is then usually transferred to the tenant. If the landlord ( then the tenant ) does not maintain proper electrical safety standards, then they could be leaving themselves open to claims for compensation for any injury caused to potentially anyone on the premises. Tenants will be responsible for maintaining any electrical equipment which they have installed. The lease may also specify that the tenant must maintain all of the electrical equipment in the property. This again highlights the importance of drafting a commercial lease.

Communal areas

Generally, the same rules for gas and electricity safety in communal areas applies as described above – it is the responsibility of the landlord until this is transferred to the tenant in terms of the lease.

Asbestos

The commercial lease will specify who is responsible for dealing with asbestos. Whichever party is responsible must ensure they comply with the appropriate guidance to ensure the safety of those on the premise. Fines can be high for failures in this area, demonstrating the importance of having a correctly drafted lease agreement.

Fixtures and fittings

A ‘fixture’ is anything attached to the building, such as lights. ‘Fittings’ are items not attached to the building, such as desks. Tenants are usually made responsible for any fixtures and fittings.

Energy standards

Commercial landlords must ensure that any property they intend to let has an Energy Performance Certificate (EPC) with a rating of ‘E’ or better. As of April 2023, it will be illegal to renew a lease on a commercial property that does not meet this minimum standard.

Contact our Commercial Property Solicitors in Aberdeen

It is clear to see who the responsibilities for certain matters rest with can be complex and depend enormously on the drafting of the commercial lease. Our expert commercial property team at andersonbain would be happy to assist in this area. Please contact us on 01224 456 789 or fill in our online enquiry form to get in touch.

 

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