Your Legal Responsibilities as a Commercial Landlord
A landlord is responsible for the general upkeep and maintenance of a building. But what else falls under your remit?
The Code for leasing business premises in England and Wales 2007 sets out the responsibilities of commercial landlords. While this isn’t a legally binding document, it does give you a good resume of what you should be focusing on.
The Code is authorised by regulatory bodies such as the British Retail Consortium and the CBI. It sets out best-practice, is reviewed regularly, and updated to reflect the changing nature of the retail industry. Under the Code, your responsibilities include:
- Alterations to the property
- Ensuring all planning permission is granted for changes of use
- Assignment and subletting issues
- Insurance and financial protection, including public and personal liability
- Lease negotiations at the start of occupancy and for renewals
- Ongoing management and service charges
- Rent reviews, guarantees and deposits
- Break clauses.
Health and Safety
Health and safety is a key responsibility for landlords. It carries the greatest risk of litigation in the event of an injury or death. Commercial landlords are responsible for various H&S issues, including:
- Fire safety regulations (including checking fire alarms are operational and that regular inspections are carried out)
- Gas and electrical safety (including ensuring all installations are checked and maintained by certified Gas Safe engineers and carrying out electrical safety inspections)
- Asbestos management (including the safe removal and disposal of any asbestos found on site)
- Water supply and hygiene (including access to toilets, washing facilities, safe drinking water, etc.)
These days, we’re all far more conscious of the effect of our activities on the planet. To combat emissions and ensure energy costs are kept to manageable levels, commercial landlords must provide tenants with an Energy Performance Certificate that conforms with the Minimum Energy Efficiency Standards (MEES). This gives every property a rating between A-G and includes recommendations for improvements where necessary.
Rent and Fees
Unlike residential property rent, commercial rent is usually calculated based on the size of the property (per sq.ft/m) or as a percentage lease. The key is to strike a balance between a rent that covers the cost of owning and maintaining the property and encouraging tenants to take up a lease. An overpriced rental will discourage potential tenants, reducing the revenue that a commercial property can generate.
Landlords also need to ensure that the lease terms are fair and comply with all current legislation. OGR Stock Denton’s commercial property solicitors can help you create a tenancy agreement that is fair to both parties, providing you as the landlord with a degree of security without infringing on the tenant’s rights.
Before renting out any property it is good practice to make an inventory. Make a complete inventory of all fixtures and fittings, as well as a statement of the condition of the property before the tenancy is signed. This reduces the chance of disputes at the end of a lease or if the agreement is terminated by either party early.
Within the agreement, you’ll also need to lay out:
- Break clause – this allows a tenant to break their lease without penalty
- Installation of utilities such as broadband or IT – who is responsible financially (the tenant or the landlord) and the maintenance of these services
- Service charges – for cleaning, maintenance of communal areas, upkeep of the building and maintenance costs
- Any additional costs
Tackling Landlord and Tenant Disputes
No matter how good your relationship with your tenants, there is always the possibility that a dispute will arise at some point. This could be down to anything from rent increases to maintenance, access or installation of digital services. If you do find yourself in this position, it’s essential to get legal advice as quickly as possible.
At OGR Stock Denton, our commercial property legal team have the experience and the expertise to advise you and represent your interests if that dispute escalates. They can also act as mediators between parties to find a solution quickly and easily.
Investment and Development
Are you ready to expand your commercial property portfolio? Have you seen a property that you’d like to buy? Or do you own a commercial property that you’d like to develop or apply for a change of use? The team at OGR Stock Denton can advise you on investment and development issues to maximise your rental income.
OGR Stock Denton – Your Commercial Property Legal Experts
OGR Stock Denton has a reputation for excellence. Whether you’re signing a new tenancy agreement, expanding your property portfolio and need commercial conveyancing services, or have a dispute to settle, we can help. If you have a question, we have the answer. With clear, expert advice that’s jargon-free and client-focused, we’ll provide you with the legal representation you need.
Call us today on 020 8346 0321. Or use our online contact form to get in touch, and our team will get back to you.