One of the big ‘grey areas’ that are often coming across the desk of a commercial property manager are the questions surrounding building maintenance works. The questions are often relating to responsibilities – it is an Owner or a Tenant expense?
Most commercial leases are different, and they are written following an agreement of terms between the Owner and the Tenant. Despite this, a general rule of thumb with commercial tenancies is that it is up to the Tenant to carry out all repairs and maintenance within the property.
This is very different from a residential lease, where the responsibility of repairs and maintenance falls on the Owner, and for this reason, we are often having to ‘educate’ new commercial tenants on their responsibilities.
Some of the more obvious items of Repairs and Maintenance, which fall under the responsibility of the tenant include keeping the electrical and plumbing equipment in a safe working condition; arranging regular servicing of fire equipment, air conditioning and mechanical equipment such as roller doors; cleaning out gutters and car park drains prior to the winter rains each year; keeping doors, locks and windows in working order; painting when required; pest control; cleaning …… and other items similar to these.
As part of professional property management services, it is good practice to inform tenants of their obligations, and to help them implement systems to ensure they are taking good care of the property they are leasing.
The exceptions to a Tenants repairs and maintenance responsibilities within a commercial property include structural works and works of a capital nature, as these types of jobs will always fall under the responsibility of the Owner.
To provide you with a general idea, structural works will include items such as the replacement of rusted roofing and support beams, the installation of new structures (if agreed), and necessary improvements to plumbing and electrical services.
Capital works are generally works required to be undertaken by a Landlord when major parts of the building or services belonging to the Landlord have reached the end of their life and require replacement. Some good examples of this will include the replacement of an old air conditioning system or hot water system; the replacement of old and unusable doors and windows; and the replacement of rusted or deteriorated wall and roof sheeting, just to name a few.
Most commercial investors understand that a certain level of capital input is required every now and then to help maintain secure tenancies and thus contribute to a successful investment.
