Whether you’re a new commercial landlord, or have been one for a while, it’s important to know what your responsibilities are.
This way, you can make sure that you’re fulfilling your legal obligations, maintaining a good relationship with your tenants and aren’t liable to legal disputes or financial penalties.
In her latest article, Commercial Property Associate Patsy Whitford outlines a commercial landlord’s responsibilities, including your fire safety, gas safety and insurance duties.
What responsibilities do commercial landlords have?
What a commercial landlord is and isn’t responsible for depends on the type and terms of the lease.
You may be responsible for the below:
- Maintaining and repairing the property, including its fixtures and fittings
- Compliance with building and safety regulations (e.g. fire safety, gas safety, electrical safety, asbestos etc.)
- Insurance
- Energy efficiency
- Heating and air conditioning
Again, depending on the lease, some of these responsibilities may fall to the tenant.
In this article, I’ll outline your responsibilities in more detail.
What are repairing obligations in commercial leases?
This depends on the type and terms of the lease.
Most commercial property leases are Full Repairing and Insuring (FRI) leases, meaning the tenant is either directly responsible for repairs, maintenance and insurance or indirectly through a service charge or other payments.
FRI lease can be used for leases of the whole of a building, or leases of part of a building, such as a shop on the ground floor with flats above. Responsibilities and costs can vary accordingly.
Find out more about who is responsible for maintenance and repairs in commercial leases in our dedicated article here.
Who pays for repairs on commercial property?
My colleague Richard Ramshaw also sets out who bears the costs for repairs in his article here.
Does a commercial landlord have a duty of care?
Commercial landlords have a general duty of care to ensure that the property is safe for their tenant and anyone else who uses the property, such as suppliers making deliveries.
However, this responsibility can be passed to the tenant depending on the wording on the lease and whether the tenant has taken a lease of whole or part, so you should always check the lease first.
What does a commercial landlord need to do for fire safety?
Landlords and tenants of commercial property usually share fire safety responsibilities.
Where commercial property is used as office space, landlords are typically responsible for:
- Ensuring fire regulations are obeyed in common areas, such as staircases and lifts, and
- Maintaining fire safety equipment.
Whereas tenants, generally have an obligation to maintain any areas used by their employees.
What fire safety measures need to be taken in commercial property?
- Regular fire risk assessments must be conducted
- Steps should be taken to prevent fires where possible
- Safety precautions should be taken, including installation of fire alarms, extinguishers, escape routes etc
- Staff should be trained in fire safety
Do commercial landlords have to provide a gas safety certificate?
Yes, as a commercial landlord it is crucial that you hold a valid and in-date Commercial Gas Safety Certificate for your property if you are letting to residential tenants.
If you are letting to a commercial tenant, then the responsibility for this is a bit more fluid and can fall to either the landlord or the tenant depending on the wording of the lease.
However, the consequences for not doing so are severe. You could receive a huge fine of thousands of pounds, your business could be closed if unsafe and you could even be given a prison sentence.
So, it’s very important to comply with the gas safety regulations either directly or by ensuring the responsibility is clearly put on the tenant, to not only keep your tenant safe, but also to protect yourself from the penalties.
Are commercial landlords responsible for electrics?
Landlords are typically responsible for the electrical installations in their property and need to make sure that they are safe and maintained throughout the tenancy if letting to residential tenants.
If you are letting to commercial tenants, then you can pass the responsibility for this to your tenant.
You may have a duty of care over the tenants and anyone else who visits the property, so ensuring their safety is a must.
For a residential letting, you also must have an Electrical Installation Condition Report (EICR) carried out on your property to ensure everything is up to regulation standard and that there are no immediate hazards.
Find out more about how to get this report, who pays for it and more, here.
Who is responsible for the EPC on commercial premises?
Energy Performance Certificates, or EPCs, rate the energy efficiency of properties from A to G.
As landlord, you need to make sure that you attain a valid EPC for your property and that your rating is at the very least an E, although this is due to increase to a C rating in 2025.
If your property is rated below this, and therefore sub-standard, you’ll need to make changes to rectify your rating before you can let the property.
Find out more about EPCs and your responsibilities here.
Who is responsible for managing asbestos in a commercial property?
Landlords are responsible for managing any asbestos in their building and they should provide an asbestos report to the tenant before the start of a new lease.
The report should include details of where asbestos is located and the measures that are in place to manage the risks.
Commercial landlords can rent out property that contains asbestos, but most tenants will require confirmation that it is deemed safe, risk-managing measures have been taken and the relevant parties are provided with a report.
Who is responsible for fixtures and fittings in commercial property?
In commercial property, fixtures are items which are fixed to the property, such as radiators, carpets, sockets etc.
Whereas fittings are items which aren’t attached to the property, such as desks, computers, mirrors, pictures, and chairs.
As a commercial landlord, you will generally not be responsible for any of the fixtures and fittings that are exclusively within the property being let, as these will fall to the tenant to maintain.
You will normally have to ensure that all fixtures that you own and are within shared parts of the property are installed correctly and maintained.
Do commercial landlords need to be registered?
No, commercial landlords do not need to be registered in the way that residential landlords do.
A commercial landlord and tenant relationship is less legally governed and more a case of negotiation between the parties.
Does a commercial lease need to be registered?
As a commercial tenant, you also have a responsibility to register the lease at the Land Registry if it has been granted for more than seven years. We would also advise a tenant to note their lease against the landlord’s title register if it is under seven years.
Specialist legal advice for Commercial Landlords
If you have any questions following this article, or would like some advice regarding your responsibilities, please don’t hesitate to get in touch with our bright Commercial Property Team.
We offer a free initial chat for all new clients. Call us on 01202 499255 or fill out the form at the top of the page to get in touch.
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