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As a local shop, newsagent or convenience store owner, it is important to make sure your building is regularly maintained. Cutting back on maintenance costs may seem like a way to save money but it can mean increased bills in the long run. Failure to look after your premises can also cause major issues such as electrical fires or flooding, resulting in damage to the buildings, contents and stock, and increasing the likelihood of employees, customers or other visitors suffering an injury and making a claim against you.

In this blog, we have pulled together information about what you need to know as a commercial property owner and/or landlord, from your legal responsibilities to how to make sure your premises are safe, secure and a welcoming haven for staff and customers. If you are looking for our blog for maintaining your business premises as a tenant, click here.

Some of the information below has been taken from guidance provided by the Commercial Tenants Association (CTA) and the National Residential Landlord Association (NRLA). Please note it is important to always check current legal requirements with your lawyer or real estate agent or refer to an industry organisation for the latest information and advice for landlords and tenants.

Handy hints for commercial property owners and landlords

As a commercial property owner or landlord, you have a duty to make sure your business property is safe for anyone who uses it, including your tenants if it is rented out.

1. Health and safety

Whilst the responsibility for health and safety usually falls on the tenant, as a commercial landlord you are responsible for complying with Fire Safety Regulations and for providing a workplace with a reasonable temperature, adequate lighting, space and ventilation, safe equipment, drinking water, toilets and washing facilities.

2. Fixtures and fittings

As a commercial property owner or landlord, you are responsible for all the fixtures and fittings you own and must ensure that they are installed safely and maintained properly. If you rent out your premises, you may agree with your tenant that additional fixtures and fittings can be installed. In the event of a claim, these would be the tenant’s responsibility. It is a good idea to include reference to this in the lease.

3. Gas and electricity

If you are the commercial property owner or landlord, you are responsible, by law, for ensuring your property’s electrical system is safe. You should have an Electrical Installation Condition Report (EICR) carried out by a registered electrician before letting out the property and the installation should be inspected every five years.

Gas safety may be the responsibility of either you or your tenant depending on the terms you lay down in the lease. However, you will usually be responsible for the safety of both electrical and gas installations in any communal areas.

4. General maintenance

Generally, as a commercial property owner or landlord, you are responsible for structural repairs (floors, roofs, foundations, and major walls) while your tenant should take care of maintenance and repairs of things such as internal plumbing or air-conditioning systems. You should ensure that the lease clearly sets out these responsibilities to avoid any ambiguity.

Commercial landlords are encouraged to follow the code for leasing business premises in England and Wales. Published by the Royal Institution of Chartered Surveyors (RICS) in consultation with various regulatory and trade bodies, whilst not legally binding it sets out recommendations for relating to lease negotiations, management, rent guarantees and deposits, rent reviews, break clauses and renewals, alterations and changes of use, assignment and subletting, and insurance.

What kind of cover should you have for your commercial premises?

Whether you are a landlord, property owner or a tenant, it is important that your premises are protected against perils such as fire, theft and natural disaster. The lease should make it clear who is responsible for arranging and paying for cover. Below are the most common types of cover you will want to consider as a landlord or property owner:

1. Buildings cover

Buildings cover is usually the responsibility of the property owner and covers a buildings structure and things such as underground service repairs and removal of debris following a covered event. It is important to ensure that a building is sufficiently covered to enable it to be brought back to the condition it was in before the event occurred – this is known as the rebuild value or reinstatement value. You may consider obtaining a professional valuation to assist with this.

TIP – It’s important to make sure you are not ‘underinsured’. The cost of building materials has increased and more than likely, so too has your rebuild cost. It’s important to ensure your limits are correct to protect you and your bricks-and-mortar asset in the event of a claim.

2. Property Owners’ Liability cover

Property Owners’ Liability is designed to cover you in the event that a person is injured, or their property damaged as a result of your negligence as a property owner, and decides to bring a claim against you. All property owners and landlords should consider Property Owners’ Liability, but it is particularly important if you let out commercial premises as higher footfall will increase the chances of an accident occurring. Typical events might be a roof tile or signage from your fascia falling and injuring a member of the public or a customer tripping on poorly maintained steps at your property entrance.

3. Loss of rent cover

As a commercial landlord you will be expecting a certain level of revenue from your property, and indeed you may be financially reliant on it. Loss of rent cover may protect you if you are unable to collect rent due to an event, such as a fire or flood, making your property temporarily unusable.

4. Contents cover

Contents cover protects the fixtures and fittings in a business premises. As a landlord you will need to ensure any contents in communal areas are protected, as well as fixtures such as shelving, display cabinets or other items if you let your premises out in a furnished condition.
Generally, most tenants will invest in their own fixtures and fittings when they take a lease on a commercial property, and should take out their own cover for contents as well as any stock they hold on the premises.

5. Legal Expenses cover

As a landlord, if you have a dispute with your tenant you may need to seek the advice of a trained legal professional. Legal expenses can cover the costs of bringing legal action or defending yourself against it. Whilst some disputes are settled quickly and easily, others can be long drawn out and costly, with devastating consequences.

It’s important that as a property owner or landlord, you are clear about your own responsibilities in order to protect your bricks-and-mortar asset. If you have any questions about a lease, talk to a legal professional and if you have any questions about your cover, speak to your provider.

Are you a tenant of a commercial property?

If you rent your premises, then click here for information on how you can maintain your business premises as a tenant.

Call. Quote. Covered.

If you want a stronger business for a stronger future, then choose The Retail Mutual as your business cover provider. Since its inception in 1999, The Retail Mutual has grown to provide cover to over 100 different trade types including retail, hair salons, barbershops and catering businesses. Why not see what we can do for your business by getting a free no-obligation quote from us? Start your quote online today or speak to a member of our service team by calling the number below.

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