If you manage or own commercial property, it’s important that you know your obligations for keeping the property in good shape. Often, the responsibility for the property is shared between the landlord and the current tenant dependent on the terms of the lease. However, there are always a few grey areas that it’s good to familiarise yourself with, particularly if your property is vacant and you’re looking for a new tenant.

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Regardless of whether your commercial property is occupied or not, it is important that you know and understand the following obligations for landlords with commercial property.

Gas

The 1998 Gas Safety Regulations state that the responsible party must make sure that any gas fittings are ‘maintained in a safe condition’ and that any gas related appliance ‘is checked for safety within 12 months of being installed’. Depending on the type of lease you have with your tenant, this responsibility normally comes down to the landlord. Meaning that you need to keep a record of all gas safety checks and ensure that any maintenance work is carried out by a Gas Safe registered engineer.

Fire and Electricity

The Regulatory Reform (Fire Safety) Order 2005 sets out the minimum fire safety requirements for property owners. Among other requirements, all non-domestic buildings must have a ‘responsible person’ in charge of fire safety. This is often the owner of the property, meaning you have a legal responsibility for the fire safety of the property. Your responsibilities include making regular risk assessments and adjustments to minimise the risk of fire.

As it is so closely linked to fire safety, electrical safety also often comes down to the landlord. Your obligations will normally include regular risk assessments of the whole property to make sure there are no loose wires or electrical related problems that could become a fire hazard.

General Maintenance and Repairs

The responsibility of maintenance and repairs will depend on the type of lease you have with your tenant, but most commercial properties are let on a Fully Repairing and Insuring (FRI) Lease. This means that during the tenancy, the tenant takes on the responsibility for any repairs and maintenance. Alongside covering the cost of returning the property in the same state it was leased in.

However, the Code for Leasing Business Premises suggests that the person obliged to take care of maintenance and repair will depend on the condition of the property and the length of the lease. So, it’s important to make sure each party's responsibilities and obligations are clearly laid out in the lease to avoid any confusion.

Asbestos

The use of asbestos in new builds was banned in 1999, however, it may still be present in a lot of commercial properties. If you are the landlord or owner of a property built before 2000, you need to familiarise yourself with the 2012 Control of Asbestos Regulations.

The regulations state that the duty holder of any non-domestic premises is obliged to manage the removal of any asbestos in the building. Meaning that if you think there is asbestos at risk of being disturbed in your property, you need to get it removed by a qualified specialist as soon as possible. Plus, as the landlord, you are responsible for protecting anyone who uses or works at the property from the risks of asbestos exposure.

Property Insurance

Having the correct insurance for your property is crucial. Many commercial landlords will look to pass the cost and responsibility on to the tenant, however, this is rarely in the landlords best interest. Picking your own insurance provider, with a transparent policy at a fair price will pay off in the long run if you ever need to make a claim.

Once you have arranged the correct commercial property insurance, then you must provide the full policy details if your tenant requests to see it. Additionally, if you don’t currently have tenants then make sure to transfer your policy over to Vacant Property Insurance to make sure your property is fully covered in the event of damage.

Minimum Energy Efficiency Services

As of April 1st, 2018 new regulations came into force meaning it is now a legal requirement for eligible rented properties to have an Energy Performance Certificate (EPC) of Grade E or above to lease the property to new or existing tenants. If you have long term tenants where there has been no change in lease since 2018, it will become unlawful to continue renting a commercial property with an EPC of E or less after April 1st 2023.

Although a few properties are exempt from the new rule (such as places of worship or buildings with temporary use) there is a fine of up to £5000 for neglecting your duty to improve the EPC of a commercial property that doesn’t meet requirements.

If you are preparing a commercial property for new tenants, staying up to date with the obligations for landlords with commercial property is crucial to avoid any difficulty or trouble down the line. To stay up to date with more guidance and advice for commercial landlords, make sure to sign up for our weekly newsletter.

If you are currently between tenants then get in touch today for a friendly chat with the Blue Door team about how our property guardian solution could help you save money and protect your property in the short term.