A commercial landlord is a property owner, who leases out commercial real estate, which is property intended for business purposes.
The role of a commercial landlord is to maximise rental income and sustain the property’s value for future sale. But it’s not just about the money. Landlords have a duty of care and legal responsibility towards property maintenance, the lease tenant, employees hired to run the property and neighbouring tenants.
They are a crucial stakeholder in commercial real estate, as without them, businesses would not be able to operate.
Despite the important responsibility, there is a clear desire for proprietors to invest in commercial real estate. Common motivating factors to becoming a commercial landlord are:
Your responsibilities as a commercial landlord will differ depending on the terms of a lease agreement. It is just as much your responsibility to adhere to the terms of a lease agreement as it is for a tenant.
In most cases, the majority of shared responsibilities lie with the tenant. While there are lots of areas to consider, here are a few examples of what you may need to consider as a commercial landlord:
A commercial lease agreement will outline who is responsible for organising property maintenance during the lease term. In most cases, commercial landlords are responsible for structural, roof and foundational repairs, while tenants are responsible for non-structural repairs like plumbing or air conditioning.
To sell a property at the best price, commercial landlords should ensure that the properly maintained and any relevant repairs are made before it goes on the market.
While we have said that commercial property is a low-risk investment, that doesn’t mean you can put your feet up and wait for the money to roll in! It is just as important for commercial landlords to protect and manage their finances, same as any other investor.
As unpredictable as the weather in the UK is, your property must be protected from weather-related damages. It’s not exactly a rare occasion for the UK high street to flood. Commercial landlord insurance is a sure way to cover your back should environmental conditions jeopardise your property.
It is also your responsibility, as a commercial landlord, to ensure timely rent collection. Any late payments, arrears, or disputes should be addressed through the procedures established in the lease agreement.
A more general responsibility as a commercial landlord is to manage your finances. Should the worst happen, i.e. structural damage or failure, you need to have the funds to cover it or adequate insurance. You can mitigate the risk of unforeseen expenses by regularly conducting maintenance checks on the property.
According to the Health and Safety at Work Act 1974, tenants of a commercial property are responsible for providing their employees with-
As much as this is the tenant’s responsibility to their employees, they cannot provide these amenities without the landlord’s commitment and supervision.
Commercial landlords must also adhere to the Regulatory Reform (Fire Safety) Order 2005 and provide safety equipment such as fire blankets and extinguishers.
Another issue to consider in commercial property management is the risk of asbestos. Commercial landlords should take the Health and Safety Executive’s measures to ensure tenants are protected from asbestos-related harms.
When you need to evict a tenant, you must serve them with a Section 146 notice or depending on the circumstances also explore the use of peaceable re-entry.
In the case of a Section 146 notice, served by a commercial property solicitor, this must outline the breach of the lease agreement and provide the tenant with reasonable time to solve the issue. If the tenant is incapable of doing so within the stated period, you are entitled to commence court proceedings to remove them from the property.
While this blog focuses more on the legal side of your responsibilities as a commercial landlord, other important factors will give you a competitive edge in what is an increasing market!
The relationships you foster with your tenants, and commitment to environmental sustainability, will appeal to businesses. As a commercial landlord, you can set the precedent for waste management and energy efficiency, which could improve your property portfolio and marketability.
We hope this blog has been useful for outlining your responsibilities as a commercial landlord.
At Blacks Legal, we can help every step of the way in your commercial property venture. Our team provide prompt and expert legal assistance to commercial landlords.
If you’re looking to work with committed and experienced commercial property solicitors, then look no further. Get in touch today by emailing info@blackslegal.co.uk or calling 020 8106 2460.