Letting commercial properties: landlord responsibilities
By Russell Corlett, Health & Safety Director, Peninsula
September 12 2019 - Renting out a commercial property is very different to renting out a residential one.
In this article, we'll outline all of your responsibilities as a landlord so you know exactly what you need to be aware of.
Health and safety obligations
There are a number of health and safety responsibilities that you'll have as landlord of a commercial property. For example, if the property has a communal area, you will need to take care of any health and safety aspects, such as gas and electricity.
However, there are a number of obligations that your tenant will be responsible for, including:
- Carrying out a health and safety risk assessment
- Providing a comfortable temperature, enough space to work and appropriate lighting and ventilation
- Providing drinking water
- Ensuring all equipment is safe to use
Before your tenants sign a lease, you need to make sure they are aware of the health and safety measures they should be taking.
As a landlord, it falls to you to ensure the property is annually inspected by a registered gas safety engineer. You must also keep hold of all certificates provided by the engineer.
According to the Gas Safety (Installation and Use) Regulations 1998, landlords need to keep a record of the yearly safety inspections for a minimum of two years.
Failure to comply to the Gas Safety Regulations could land you with a hefty fine, or even time in prison.
The Regulatory Reform (Fire Safety) Order 2005 states that fire safety duties in a commercial property are imposed on a "responsible person". This person is generally the one in charge of fire safety on the premises. "Responsible person" means either the employer of a workplace or the owner of the property. Often, it can be both.
Duties under the order include:
- Taking fire safety precautions to ensure people remain safe in the event of a fire
- Making sure emergency exits are clear and fire safety equipment is kept in proper working order
- Carrying out risk assessments regularly
If the person(s) responsible for these duties fails to comply, they could face a fine or jail time.
Fixtures and fittings
It goes without saying that any fixtures and fittings installed on your premises need to be safe and secure. Your responsibility as a landlord is to make sure that they are installed correctly and, where relevant, have a safety certificate.
If your tenants install fixtures and fittings themselves, they will be responsible for maintaining them. It's best to make it clear what you will be accountable for, and what they should be aware of if they do choose to make amendments to the space.
It's very important that you maintain electricity safety standards and the Electrical Safety Council recommends testing should be carried out every five years, or when there's a change of tenants.
Though you'll be responsible for the electricity safety of the property, any electrical appliances provided by the tenant will be theirs to maintain.
It will be down to you to manage any faults with the property itself, if they occur. For example, you'd need to tackle any structural issues that arise.
Typically, your tenant will need to keep the property in good condition, and this should be highlighted in the lease.
If your property was built before 2000, you'll need to carry out an assessment to check for asbestos. It doesn't need to be removed immediately, but you will need to manage it properly, as failure to do so can lead to a two-year prison sentence and a fine of up to £20,000.
Energy efficiency standards
As of April 1, 2018, all properties must have a minimum energy performance rating of E on an Energy Performance Certificate (EPC). This means that you can't renew existing tenancies or grant new ones if the building has an energy efficiency rating lower than E.
There is currently a bit of debate over whether these regulations apply to Listed Buildings. You may be able to claim exemption if the work required to improve the rating to E standard would significantly change the appearance or character of the property.
When renting out a commercial property, it's important to be aware of all the responsibilities and legal requirements you'll face as a landlord. Remember, laws change all the time, so it's important to stay vigilant and remain aware about mandatory obligations at all times.