Your One Stop Guide For Your Responsibilities As A Commercial Landlord

If you are the landlord of a commercial property, it is crucial that you understand the responsibilities that you have to your tenants. Under the law and under the terms of the lease, you will have many duties to fulfil in terms of health and safety requirements and with regard to the upkeep of the building. Whilst many of these responsibilities will be shared between you and your tenant(s), our guide outlines some of the most important things you should be aware of as a commercial landlord.

You will typically share responsibilities for health and safety compliance with your tenants. Whilst they may be required to look after the space they rent, the landlord is likely to have to look after compliance in communal areas. For example, if your tenants pay a service charge for a lift to be cleaned and maintained, you will have to ensure that health and safety regulations are complied with in this area.

Commercial leases differ from residential leases. Under a residential tenancy the onus is often very much on the landlord to comply with any regulations, whereas under a commercial lease the tenant is generally responsible for much of the health and safety compliance, even if you hold the commercial mortgage.

Many commercial landlords believe they must ensure that gas safety checks are undertaken, but it is actually the responsibility of the tenants under the Gas Safety Regulations 1998. The tenants must also ensure that any gas or electrical equipment is maintained and regularly serviced by an engineer who is not only qualified but also registered with the relevant authorities.

The Gas Safety Regulations state, in relation to commercial property, that it is the tenant's duty to ensure that a gas safety check is done every year. This may come as a shock to many, as this differs from residential lettings where it is the duty of the landlord. It is also up to the tenants to ensure that equipment is maintained and any work undertaken is done so by a qualified gasworks engineer. Failure to comply means that the landlord may be able to sue the tenant for dangerous premises.

Fire safety is another responsibility that is shared between the tenants and the landlord. If a building is occupied by several businesses or tenants, you as the landlord must ensure that communal areas are maintained in accordance with fire safety regulations, but the tenants will be responsible for their own areas such as a fire door out of the office.

Energy Performance is now high on the agenda and the government are becoming progressively more interested in making sure businesses are not being wasteful. It is a responsibility that falls to you as commercial landlord is to provide prospective tenants with an Energy Performance Certificate (EPC). The EPC provides information on energy efficiency using an A-G rating system.

Don't forget also that you need to ensure that your business loan and commercial mortgage is paid regularly and in a timely fashion. Manage your income from rent and your cash flow carefully to ensure that you don't end up in commercial mortgage arrears.

Another responsibility is maintenance and repairs, usually only on the exterior. You should always ensure that the roof, outdoor plumbing and things of that nature are taken care of.

Unlike residential tenancy agreements, the duty of care under a commercial lease is often on the tenant, not the landlord. Even if this is the case, it is recommended that you set out both your and your tenants responsibilities in a lease or other contractual agreement before the tenancy begins.


------

Howard writes for Just Commercial Mortgages.com the UK's No.1 site for the latest commercial mortgage rates and commercial property finance news.