Just like renting out a residential property, renting a commercial property comes with a lot of responsibilities. This article highlights your most important duties when renting out a business space.
Health and safety
As a landlord of a commercial property, it’s your duty to make sure the business premises are well maintained so that people can work there safely. If, for instance, the building has a communal area for staff to eat and prepare their lunch in, you’ll need to ensure the gas and electricity facilities are in proper working order to eliminate risk of accidents.
It might fall to you to carry out risk assessments in your property. Though you might not be responsible for fire safety (the tenant will need to have their own procedure for this), it’s worth including in your assessments. That way you can confirm who is accountable for fire control measures and verify that they’re in good, working condition.
There are several other health and safety factors your tenant will need to take care of, such as:
- Ensuring all equipment, such as toasters and kettles, are safe to use
- Providing enough space to work and comfortable lighting, ventilation and temperatures
- Providing drinking water
Always make sure your tenants are fully aware of their health and safety responsibilities before they sign the lease to make sure they’re not taken by surprise further down the line.
Maintenance and repairs
Your tenants will need to keep the property in good condition, so this is something you should include in the lease. Any reasonable wear and tear obligations will fall to them.
However, if any faults(such as structural issues or problems with mechanical systems) occur with the actual building, it’ll be down to you to manage the problem.
You can choose to put a clause in your lease that states any improvements made by your tenants need to be removed when they move on, and your premises must be restored back to how they were before. Be aware that your tenants can negotiate this clause if they’re so inclined.
Right to carry out work
As a landlord, you have a right to check your property’s condition during the lease. You can also carry out work on the premises and show them to prospective buyers. This must be done in a reasonable manner so that you don’t disturb any employees working in the building.
If the property gets damaged under the tenant’s care, the tenant will need to remedy the situation unless they can prove that the incident was not their fault (or the fault of anyone they’ve allowed to access the property).
The burden of proof reverses in the event of a fire; in this case you would need to prove that the tenant, or anyone they’ve allowed onto the premises, caused the fire.
Your tenant will usually be responsible for fitting out business premises, unless they’re already satisfactory enough to use straight away.
If the lease is negotiated while the building is still under construction, you can discuss any improvements your tenants would like to make and include these in the construction process.
In cases where the building needs a lot of fitting-out work, you can provide the property to the tenant free of rent (for a negotiable period), before the lease commencement date. This allows the tenant to carry out the necessary works before the company is due to start working there.
It’s important that you know about all your responsibilities and legal requirements when renting out a commercial property. Laws are prone to change, so make sure you stay vigilant and keep track of your compulsory duties at all times.
Contributed by: Alan Price – Employment law director at www.peninsulagrouplimited.com