A Guide To Your Rights And Responsibilities As A Commercial Landlord

If you the landlord of commercial premises, then you are subject to a range of regulations and laws that you need to be constantly mindful of when running your business. These responsibilities cover a range of rights that your tenant has, and include health and safety requirements as well as more general duties about maintenance and the upkeep of the building. Many responsibilities are shared between you and your tenant, here is a quick rundown of the main areas you need to focus on.

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.

All owners of any property, commercial or residential have a legal 'Duty of Care' towards anyone (yes, amazingly, even burglars) who sets foot on the property. In effect this means that from the moment a person enters a property, be they a courier dropping off a package or an employee of the tenant, the owner of the property is liable for their well being. This places the responsibility on you the landlord to go to all reasonable lengths to make sure your property is a safe environment.

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.

Fire safety is another important issue and, again, the responsibility for this is shared between you and your tenant(s). Whilst your tenants may have responsibility for ensuring that fire safety regulations are adhered to in the premises they rent, you will typically have overall responsibility for the building. So, you are likely to have ultimate responsibility for building systems such as a fire alarm.

In terms of electrical safety, the wording of the lease is important in determining who has overall responsibility. Either a separate agreement, or the lease itself should detail whether the landlord, agent or tenant takes on these responsibilities. Tenants are typically responsible for assessing all appliances in a building to make sure they are safe (many employers now have a ban on staff bringing items such as kettles and toasters to work for the staffroom as they cannot ensure they are completely safe). Tenants might have responsibility for appliances, but landlords are responsible for the wiring of a building, which is of course a major cost if it needs updating or improving.

When using a commercial mortgage to buy a property, you are obliged to provide your tenants with an Energy Performance Certificate (EPC). EPCs provide information on the energy efficiency of a building as well as suggestions on how carbon emissions can be reduced and energy usage minimised.

Do not 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 do not end up in commercial mortgage arrears.

As a rule of thumb, internal repairs tend to come down to the tenant and external repairs tend to be the responsibility of the landlord, but make sure this is the case in the exact terms of your agreement with the tenant. A good working relationship with the tenant is extremely valuable when issues of repairs come up as the more flexible a tenant is on areas of responsibility, the easier your life will be.

If you follow all of the advice here, then there should be no problems and everyone will know where they stand.