Landlord duties around certification
When granting a new commercial lease, a landlord is obliged to supply certain certificates and information to its tenant, but what information? Anna Zatouroff, a Senior Associate in our real estate team explains.
A prospective tenant will want as much information as possible about the presence and condition of asbestos in the unit and the whole building. The standard commercial property enquiries ask the landlord for a copy of the asbestos record of the assessment carried out, any revisions of the initial assessment, and the written management plan.
The tenant will be concerned to see that the landlord has complied with its statutory obligations and this written plan will give an indication of what work is planned, and might be charged for, under the service charge provisions in the future. It may also indicate any problems that the tenant may face in carrying out its own alterations.
During the term of the lease the landlord and the tenant will each want a copy of each other’s record of assessment and written plan and will be under a duty to co-operate to share this information
In multi-let premises, the responsibility for maintenance of the common parts, services, external fabric and main structure of the building will generally lie with the landlord. It will be the responsibility of the landlord to arrange for asbestos surveys of those parts to be carried out and for copies of the asbestos registers to be given to each tenant. The cost will generally be a service charge item.
Even where the landlord has passed the responsibility for repairs and maintenance for the whole property to the tenant, and occupiers have duties to their staff and workers under the Control of Asbestos at Work Regulations 1987 and 2002, the landlord will continue to be a ‘dutyholder’ under the Control of Asbestos Regulations 2012 (CAR12) and may have to step in and carry out work in the event of the tenant’s default.
The rules are policed by the Health and Safety Executive (HSE).
Fire safety is governed by the Regulatory Reform (Fire Safety) Order 2005 (RRO 2005). The duty to carry out a fire risk assessment is the responsibility of the “responsible person”, that is, in the order of priority:
(a) The employer, if the premises are under its control to any extent
(b) if there is no employer in respect of the premises, the person who has control of the premises (whether the occupier or owner of the premises or not) for the purpose of a trade, business or undertaking (whether or not for profit).
(c) in other cases, for example if the property is empty/ has not been let, the duty falls on the owner.
Therefore, the prospective tenant will want as much information as possible to ensure that it complies with it duty and so it can ascertain what costs may need to be incurred to comply.
Electricity and Gas Certificates
There is no obligation to provide electricity and gas safety certificates before granting a commercial lease. The requirement for a ‘gas safety check’ relates to residential property.
However, there is an obligation under The Gas Safety (Installation and Use) Regulations 1998 (SI 1998/2451) (Gas Safety Regulations 1998), for landlords (of any type of property, whether residential or commercial) and employers to check that anyone carrying out work on gas appliances or flues is registered on the ‘Gas Safe Register’. This obligation in the commercial arena cannot be passed on to the tenant and the landlord remains ultimately liable.
Under the energy performance regulations, a landlord is required to provide to its tenant a current energy performance certificate. This certificate must be available from the point that the property is put on the market, which is an early stage.
Certain types of properties are exempt these requirements, but by and large most will require an energy performance certificate to be made available. In most cases, the certificate is accompanied by a Recommendations Report which sets out cost effective improvements that could be made to improve the property’s energy efficiency. We have other articles available on this website about the EPC regime.
The tenant will want to know that the unit and building are insured. The landlord should provide a copy of the current buildings insurance certificate and details of the policy. This will usually give the tenant the details of the insurer, policy number, details of the premises to which the insurance relates, the risks covered and the exclusions, the excesses payable, the sums insured, the names of the insured and when the policy is due for renewal. Lifts and escalators are often covered under separate engineering policies.
It is good form to pull together and provide packs of operating manuals, instructions, service histories and equipment warranties to tenants for their fixtures and the building systems in their premises.
In conclusion, ensuring that all the above information is readily available at the start of a transaction helps matters to progress smoothly and provides re-assurance to a tenant that their landlord is responsible and reliable and that its building is well managed.