If a Landlord Fails to Make Repairs on a Commercial Property Rental

Most commercial property rental leases provide that the landlord is responsible for making certain major repairs.  These repairs generally include the roof, major building systems, including air conditioning, heating, plumbing, electrical and exterior walls and utilities.  The tenant’s responsibility is to give the landlord notice that the item needs repair. The landlord must fix the repair within a reasonable time, unless otherwise specified in the commercial property rental agreement. You do have legal rights under the law and in accordance with your lease terms.  You should speak to a commercial real estate attorney before you enter into a commercial lease.  The attorney can help you with the negotiations, and review the lease terms.          

Impact on Your Business

If the landlord fails to take care of the repairs, you could suffer the following business losses:

• Loss of customers and/or staff  
• Loss of revenues or even go out of business
• Inventory damage and losses
• Damage or loss of use of business equipment

You could get stuck paying your rent when you cannot use the premises.  If you don’t pay the rent, you could be evicted. Even if you are willing to take care of the repairs yourself, your lease terms may not allow you to do so.   These are common occurrences, and often result in disputes if not addressed during the lease negotiations.  

Negotiations Regarding Landlord Repairs

The following lease provisions should be included in your commercial rental lease so that you are protected if your landlord does not make the necessary repairs:

• You are permitted to make repairs, and deduct them from the rental amount
• The landlord is liable for any monetary losses you suffer as a result of the landlord’s negligence in not making the repairs or not making them in a timely manner.
• A reduction in rent during the time that the defects starts until the defects are cured 
• You are permitted to terminate the lease and get any security deposits back if your landlord refuses or fails to make the necessary repairs

If your landlord does not agree to provide for such remedies, it’s a sure sign that you should not enter into the lease, and you should find another rental property. You don't want to get off on a bad start and put yourself and your business at a disadvantage. 

When to Talk to an Attorney

A real estate attorney can assist you with commercial lease negotiations.  The attorney can also assist you with resolving disputes between you and your landlord.  A commercial real estate attorney can represent you in a landlord/tenant litigation matter as well.