As the owner of a small business, if you’re planning to take on a new commercial lease agreement, you’ll be eager to know what your landlord is responsible for. 

In this article, we’ll delve into this topic in more detail, to give you a good overview understanding of commercial landlord responsibilities.

How do the roles differ in a commercial lease?

As a business tenant, you’ll take on a number of responsibilities. These typically include paying rent and other property-related costs, as well as meeting any maintenance and repair obligations set out in your lease.

You’re also accountable for ensuring the property is used in line with the lease terms, for example, complying with permitted use restrictions, trading hours, and similar conditions.

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However, as a landlord, there is a different set of responsibilities. The landlord will be either the freehold owner of the commercial premises or will be a long leaseholder. As such, their primary responsibility is to collect the rent and ensure that the interests of the building are met and that the property is not placed in jeopardy as a result of the tenant’s occupation. 

The precise details of what this entails will depend on the terms of the particular lease, but there are some broad commonalities shared by the majority of leases.

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Which repairs are my landlord’s responsibility?

It will depend on the type of building and the agreed lease terms, but the vast majority of commercial leases fall into one of the following two categories, and the following broad maintenance principles apply:

Full repairing lease of the whole building

This is where you lease an entire building and assume responsibility for the repair and maintenance of the whole unit. In this situation, the landlord bears no responsibility for such matters, and the tenant is responsible.

Internal lease of part only

In this arrangement, the tenant rents part of a larger building. They’re typically responsible only for internal repairs and maintenance within their own unit, while the landlord remains responsible for the building’s structure, roof, and shared areas. However, commercial tenants are usually required to contribute to a service charge, paid alongside other occupants, which covers the upkeep of the building’s structure and communal spaces such as the reception, corridors, shared kitchens and toilets, and lifts.

What does ‘quiet enjoyment’ mean?

This means that your landlord is required to allow you to use and enjoy your property without improper interference. This is provided that you keep up-to-date with your rent and comply with your lease terms.

Who is responsible for insuring the building?

It’s nearly always the case with commercial property insurance that the landlord will insure the property and then pass the cost of the insurance back to the tenant. This happens regardless of whether the lease is a full repairing lease of the whole building, or a lease of part only. 

The only difference in this regard in that in a lease of part only, each tenant will pay only a proportionate cost of the total cost of the buildings insurance – typically assessed by their own net floor area as a percentage of the whole building floor area.

About the author

Ashley Gurr is an experienced commercial property lawyer at LawBite, who has represented SME clients for many years in the fields of property, general commercial and employment law.