Becoming a Commercial Landlord – What Are Your Responsibilities?
Becoming a commercial landlord comes with important responsibilities and obligations when granting a lease to a potential tenant. Whether you own a portfolio of residential properties, retail units, or office buildings, understanding and fulfilling these duties is essential to maintaining positive tenant relationships, complying with legal requirements, and protecting your long-term investment. This blog outlines key responsibilities every commercial landlord should be aware of.
Repairs and Maintenance
A fully repairing and insuring lease (FRI lease) outlines the responsibilities for repairs and maintenance. These obligations can differ depending on whether the lease is for the whole property or just part of a larger building.
If the landlord grants a lease of the whole property, the tenant is usually responsible for repairing the entire premises and covering all associated costs. If the lease is for part of a property (e.g. one unit in a larger complex), the tenant will still have repair obligations, but will also contribute to the maintenance of shared areas and the building exterior via a service charge.
From a landlord’s perspective, the state of repair is crucial because it impacts the value of their long-term investment (the reversionary interest). Poor maintenance can lower the capital value, reduce the appeal of the property to future tenants, and ultimately result in lost rental income.
Insurance
In most cases, the commercial landlord is responsible for insuring the structure and fabric of the property. Because the landlord has made the capital investment, they typically arrange the building insurance to protect that investment in the event of damage or destruction.
The lease will detail the risks to be insured against and will usually include a covenant requiring the tenant to reimburse the landlord for the insurance premium. The tenant may also be responsible for related costs such as:
- Policy excesses
- Loss of rent insurance premiums
- Insurance valuations
Compliance with Building, Safety, and Energy Efficiency Regulations
Commercial landlords must ensure that their properties are safe and legally compliant. This includes meeting building and safety regulations covering fire safety, electrical systems, gas appliances, and water hygiene.
It is also a legal requirement for all commercial properties to have a valid Energy Performance Certificate (EPC) with a rating of at least E. Properties with a lower rating cannot be legally let unless an exemption applies. Landlords must provide the EPC to new tenants at the start of the tenancy.
Need Advice?
If you need help or advice about your responsibilities as a commercial landlord, please contact our Commercial Property Solicitors for further advice and assistance on 01604 828282 or email [email protected].
Written by Zoe Hale
Trainee Solicitor, Commercial Property at Franklins Solicitors LLP
Specialises in drafting legal documents, managing Land Registry applications, compliance and AML checks, property searches, file management through to completion, legal research, and client reporting.
Zoe Hale is a Paralegal in the Commercial Property team at Franklins Solicitors LLP. She holds a First Class BA (Hons) in English and History from Nottingham Trent University and has since completed both the Graduate Diploma in Law and the Legal Practice Course with Distinction at Nottingham Law School.
Zoe assists with a broad range of commercial property matters, including drafting legal documents, preparing Land Registry applications, managing compliance processes, and supporting clients through property transactions. She also provides legal research and reporting support across a variety of matters.
Outside of work, Zoe enjoys travelling, attending concerts, and a spot of retail therapy.
