Knowing who is responsible for repairing which part of a commercial property is important.

Not only will the landlord want to protect their investment and the value of the property, but the tenant will also need to know what their obligations are.

In this Q&A, Commercial Property Solicitor Richard Ramshaw outlines who is responsible for repairing and maintaining the property in a commercial lease.

Who is responsible for repairs in a commercial lease?

Most commercial property leases are fully repairing and insuring (FRI) leases.

An FRI lease is where the tenant is responsible for the repair, maintenance and insurance of the property.

FRI leases can be used for leases of whole (for example, one unit on an industrial estate) and leases of part (for example, a ground floor shop with residential flats above).

Find out more about leases and how they work here.

What are tenants responsible for?

With a lease of whole, the tenant would be responsible for all costs in relation to the property, which includes the exterior roof, structure and also the interior of the property.

With a lease of part, it’s important for the definition of ‘property’ to be properly defined.

For example, they will often refer to including one half horizontally if the property being leased is situated on the ground floor. This is because the tenant of the first floor will be responsible for the remaining half which will form part of their flooring.

Does a commercial landlord have to have insurance?

Yes, in both a lease of whole and of part the landlord will insure the property and recover the sums back from the tenant.

The landlord will want to make sure the property is insured at the correct level and covers all ‘insured risks’ required for that particular property.

Despite the landlord being responsible for the arrangement of building insurance, the tenant will usually pay for it.

This is because the tenant will have the benefit of the insurance.

What repair responsibilities do commercial tenants have?

For the lease of whole, the tenant is responsible for all repairs.

The repairing obligations will either be:

1. to keep the property in ‘good (and substantial) repair and condition’ or
2. in the same state of repair as set out in the schedule of condition.

As a tenant, it’s important to obtain a survey of the property before completing the lease so you know what you’re getting yourself into.

What repair responsibilities do commercial landlords have?

For the lease of part, repair responsibilities will be shared.

The landlord will be responsible for the exterior structure, services and common parts. The tenant will be responsible for the interior property.

Can a landlord inspect repairs?

Yes – the landlord can enter the property to inspect the state of repair and condition.

Most leases allow the landlord to serve notice on the tenant to rectify any disrepair. If the tenant doesn’t do this within a reasonable time, the landlord can carry out those works and recover the sums back from the tenant.

At the end of the term, the landlord can prepare a schedule of dilapidations which sets out any disrepair.

If property manager is hired how do they facilitate the process?

Rental property management companies play a vital role in overseeing repair responsibilities between commercial landlords and tenants. They ensure lease agreements clearly outline repair duties, guiding both parties on obligations. In cases of disrepair, these companies coordinate inspections and communicate effectively with tenants for prompt issue resolution. Through proactive communication and lease adherence, they help maintain commercial properties. At the core of their operations, property management firms strive to balance the interests of landlords and tenants, fostering harmonious relationships and optimal property maintenance.

Specialist Commercial Property Solicitors

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You can contact our bright Commercial Property Team by calling 01202 499255, we offer a free initial chat for all new clients.