Many individuals like the idea of buying a commercial property and renting it out, which is understandable – in the right circumstances it can be a very lucrative opportunity. However, what often isn’t considered enough is the responsibilities you take on when you become a commercial landlord. There are obligations from both landlords and tenants that need to be fulfilled.
In this guide we’ll be looking at what landlords are responsible for under a commercial lease, to help give you food for thought if you’re considering becoming a landlord. Equally if you’re a commercial tenant and aren’t sure what your landlord should be doing, this information will benefit you too as responsibilities can overlap which causes a lot of confusion.
Health and safety
When it comes to health and safety, landlords are mostly responsible for communal areas. This means having suitable toilets and washing facilities, working temperature controls, suitable lighting etc. Essentially any fixtures and fittings that they own within the property should be correctly installed and maintained, to ensure the safety of the tenants when they’re in the building. The lease should clearly outline where the landlord’s responsibilities with health and safety measures end and the tenants begins to avoid any miscommunication.
Maintenance and repairs
This is where confusion often arises as in a residential lease it is typically clearer which party is responsible for maintenance and repairs. Many commercial properties are let on a Fully Repairing and Insuring (FRI) lease. Under this type of lease, the onus is on the tenant to carry out repairs during the tenancy and ensure the building is returned back to its original condition at the end of the lease. However, the landlord will normally be responsible for looking after communal areas if the building is being let to multiple tenants.
Also, they will handle any structural repairs that involves things like the roof, flooring, foundations etc. A landlord can sometimes add on a service charge for maintaining communal areas. It’s important to ensure that the landlord and tenant responsibilities for maintenance and repairs are outlined in the documents during property conveyancing Newcastle.
Gas and electricity
Gas safety within the building can be the responsibility of both the landlord and the tenants depending on the agreement made in the lease. However, it is the landlord who has a legal obligation to make sure the electrical system in the property is safe. According to the Landlord and Tenants Act 1985, a building’s electrical installation has to be ‘safe at the beginning of the tenancy’ and ‘maintained in a safe condition for the entire duration of the tenancy’. In addition, the landlord’s duty of care goes further than just to the tenant but also to anybody who visits the property whether that is customers, office workers, etc.
The Gas Safety (Installation and Use) Regulations 1998 states that landlords need to make sure every appliance and flue receives a safety inspection within 1 year of it being installed, and every year moving forward. Once the necessary checks have been completed by a Gas Safe registered engineer, a copy of the gas safety certificate awarded to you should be given to the tenant within 28 days of the inspection. As of April 2023, it is a legal requirement that landlords only renew a lease on a property that meets the minimum EPC (Energy Performance Certificate) standard of an E rating or above.
Under the Control of Asbestos Regulations 2012 it is the ‘duty holder’ who is responsible for managing any asbestos in the building. This can either be the landlord or tenant depending on the terms of the lease. For example, if it is an FRI lease then it will be down to the tenant. However, if the lease doesn’t clearly state who should deal with asbestos it will be the person who has the most control over the building, which in many cases will be the landlord. It’s not always a necessity to remove asbestos but it does need to be regularly managed as well as being noted in the building’s risk assessment before any work is completed. It’s important to note that buildings built after 2000 shouldn’t have any asbestos, but it can’t be ignored if it is present.
In accordance with the Regulatory Reform (Fire Safety) Order 2005 the person with most control of the property should be responsible for fire safety. If the property isn’t a workplace, then the individual in control will likely be the owner/landlord. Whereas if the building is used as a workplace, then the employer (tenant) will be the one responsible for fire safety. It can be down to the landlord to provide fire safety equipment like blankets and extinguishers, depending on the terms of the lease. In any case though, the landlord will always be in charge of fire safety in communal areas of the building.
The extent of a landlord’s responsibilities will depend on what is agreed within the lease agreement with the tenant. They might not have many responsibilities and are more of a hands-off landlord, or they might want to oversee things directly. If you’re buying a property and need help from experienced commercial conveyancing solicitors in Cramlington, Toomey Legal are on hand to help. Our expert team of commercial property solicitors have the knowledge and expertise to ensure the process goes smoothly and efficiently – saving you time and stress. Contact us today to discuss your needs.