What Are The Responsibilities Of Commercial Property Landlords?

24 October, 2016 | Wade Hansen

The obligations of a landlord of commercial property are usually set out in the Deed of Lease between the Landlord and Tenant. There are also obligations implied by statute law

Assuming the Deed of Lease is in the usual form used by Lawyers, the most common obligations for a landlord are as follows:

Maintenance and Repairs

The Landlord is usually obliged to keep and maintain the premises (including building services) in good order and repair and weatherproof. This however does not normally extend to the interior or breakages and minor repairs. If the repairs are of a minor nature and the Landlord completes them, the Landlord may be able to recover the costs for these from the Tenant.

Building Act

Usually the Landlord is required to comply with the Building Act and Building Code and must supply to the Local Authority a Building Warrant of Fitness, if required. The costs of having to provide a Warrant of Fitness are recoverable by the Landlord from the Tenant.

Health and Safety

Under the Health and Safety at Work Act, a class or people known as PCBUs (Person Conducting a Business or Undertaking) have the primary duty to ensure the health and safety of workers and others affected by the work they carry out. It is clear that Landlords will also be considered as PCBUs to ensure that the Landlord must reasonably do all things it can to manage the health and safety of workers on the property. Landlords also need to ensure the coordinate health and safety plans with building tenants when work (repairs, maintenance, etc) is carried out in an occupied building.

Insurance

The Landlord must insure the premises, the costs of which again are recoverable from the tenant. Note that the Landlord cannot recover loses from the Tenant where the Landlord is required under the lease to insure against such risks or the Landlords insurance cover does not extend to such risks.

Quiet Enjoyment

It is a fundamental obligation of Landlords to allow the Tenant to hold and enjoy the premises without any interruption by the Landlord. It does not mean that the premises may not be subject to noise, but rather the Tenant must have the right and full benefit of the premises without interference from the Landlord.

Assignments of Lease

If the tenant wishes to assign the lease to someone else, the Landlord must act reasonably when considering an assignment of lease. They cannot unreasonably withhold their consent nor impose further obligations that are unreasonable.

There may be other obligations that they landlord may be subject to and like all terms of the lease, these and the above obligations are negotiable. It is therefore important to consult your lawyer prior to entering into any formal lease of your property.

For advice on commercial property and commercial leases, contactNZ commercial property lawyer, Wade Hansen on 09 837 6885 or email wade.hansen@smithpartners.co.nz