What are Commercial Landlord/Tenant Obligations

Asbestos Risk Assessment

Responsibility falls on the owner of the non-domestic premises or organisation that has clear responsibility for the maintenance or repair of the premises through the lease. A penalty can be incurred if there isn’t a suitable plan in place to deal with Asbestos; a fine of up to £20,000 or imprisonment for up to 12 months.

Building Insurance

Landlords will arrange, control and pay for the buildings insurance and seek reimbursement of the premiums from the tenant. However as a tenant you are usually responsible for insuring the plate glass of the property and also will need to arrange public and employers’ liability insurance alongside contents insurance.

Disability Discrimination Act (DDA)/The Equality Act 2010

The Equality Act 2010/Disability Discrimination Act specifies in guaranteeing equality for disabled people by safeguarding the necessary changes in which a service is provided and/or the removal of physical barriers to the disabled, this is classed as the ‘duty to make reasonable adjustments’. Landlords will need to make these reasonable adjustments whilst negotiating with prospective tenants or understanding the needs of existing tenants. It is therefore essential that owners of commercial properties are aware of their duties, in order to avoid the potential penalties for non-compliance.

Energy Performance Certificate

An Energy Performance Certificate gives an understanding on how energy efficient a building is, using grades A-G. Before a tenant can move into a property the Landlord needs to provide them with an Energy Performance Certificate (EPC), it has been made a legal requirement. A landlord could face a fine of £500-£50,000 based on the Rateable Value of the building.

Fire Safety/Risk Assessment

Both landlord and tenant normally share Fire Safety responsibilities, this is down to the ever increasing multi-occupied office blocks. Therefore all tenants have responsibility for their demised area used by their employees. The landlord will be responsible for common areas, whereby they are also responsible for maintaining shared fire safety equipment i.e. fire alarm systems covering the whole premises. The ‘Responsible Person’ can be fined or imprisoned if you do not follow fire safety regulations).

Health & Safety Regulations

Health and Safety can be a shared responsibility in a non-domestic dwelling, this is relevant where numerous businesses operate within the same premises and have use of shared common areas. However within a tenant’s demised area it is their responsibility to look out for the welfare of their employees. This means undertaking a Health and Safety Assessment meeting a number of requirements under Health and Safety rules. Ultimately the lease will determine the division of these responsibilities between Landlord and Tenant.

Electrical Installation Condition Report (EICR)

The EIC report highlights the state of the electrical installation and to highlight any defects or abnormalities from the current revision of the electrical regulations BS7671. Commercial properties need to have this certificate updated either every 5 years or every change of occupancy, the EIC report is part of the Landlord’s obligations before leasing out the property.

TV Licence/Public Performance Certificate

As a tenant you will need to purchase a TV Licence to cover your organisation whilst occupying the premises, it is a criminal offence to not hold a TV Licence. Therefore a penalty has been implemented to stop tenants from not purchasing a licence; a fine of up to £1,000 if your company watches TV without a licence.

Stamp Duty Land Tax

Stamp Duty Land Tax is the tax placed on legal documents commonly in the transfer of assets or property. Different rates apply whether purchasing the freehold of a commercial property or whether you are looking to lease. Furthermore SDLT is payable by the buyer on freehold purchases and by the tenant on a leasehold basis, to find out more on the understanding of SDLT and what is payable visit www.gov.uk.


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