Commercial Leases: Landlord Responsibilities
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Commercial leases are governed by the Uniform Commercial Code. The responsibilities of parties to a commercial lease are different than those of a residential lease. In general, the landlord has less responsibility and the tenant has more responsibility; however, the lease agreement terms dictate who is responsible for what as long as they are within the law.
Who Is Responsible for Commercial Property Repairs?
Generally, a commercial landlord is responsible for the following repairs (unless the lease agreement states otherwise):
- Roofing repairs and replacement;
- Exterior wall repairs; and
- Repairs to utilities such as plumbing and electricity.
Unless otherwise negotiated, all other repairs are generally the responsibility of the tenant. Also, if the items the landlord is responsible for are in bad repair and it impacts your business, generally you are out of luck. A commercial landlord has limited duties. One way to remedy in this situation is to pay for repairs and take the repairs out of your rent. If you do this, you will need to discuss it with your landlord to make sure he does not hold you responsible for rent in addition to the repairs. It is best to do everything possible to avoid litigation, so negotiate with the intention of coming to an amicable way to resolve the situation.
Negotiating Lease Terms
One way to remedy the impact of a landlord leaving you with repair costs and rent is to negotiate terms into your contract that will protect you. It is a good idea to ask for the following terms in your commercial real estate lease:
- A provision allowing you to make repairs and deduct them from rent after notice is given;
- A provision making the landlord responsible for adverse impact to your business caused by the landlord's failure to make repairs of which the landlord has been notified;
- A provision expressly reducing the rent for the amount of time the repair is not done to offset any impact the disrepair has on your business.
If your landlord will not agree to any of these provisions, you may want to take your business elsewhere. An attorney can negotiate favorable provisions on your behalf.
Getting Legal Help
If you are entering into a commercial lease or already have one and you want to find out more about what a landlord is responsible, you can review your lease agreement with an experienced real estate attorney to clarify your rights and responsibilities. An attorney will help you asses your situation and help you negotiate any terms if you haven't yet signed an agreement.