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Home / News and Insights / Blogs / Real Estate / 179: What certificates must a commercial landlord provide to its tenant before granting a lease?

There are a number of legal health and safety requirements which landlords and tenants must be aware of prior to a tenant taking on a lease and in particular, consideration must be given to the certification that landlords should be providing to its tenants.

EPC

Providing an EPC is a legal requirement under the Energy Performance of Buildings (England and Wales) Regulations 2012 (the EPC Regulations). A valid EPC must be provided to any prospective tenant at the earliest opportunity, even if this is after completion free of charge (Regulation 6). Failure to comply with the EPC Regulations (without a legitimate excuse) could result in a penalty charge at 12.5% of the rateable value of the building, with a minimum penalty of £500 and a maximum penalty of £5,000 enforceable by Trading Standards Officers.

Since April 2018, before letting out any commercial building a landlord must be able to provide an EPC rating of E or above in order to comply with minimum energy efficiency standards.

Asbestos

The responsibility for the management of asbestos in commercial properties belongs to the ‘dutyholder’ under the Control of Asbestos Regulations 2012. The Regulations are wide-ranging and can apply to both landlords and tenants.

The landlord will always be a dutyholder, particularly with multi-let properties when the maintenance of the common parts, external fabric and main structure and services of the building will usually be the responsibility of the landlord. It is the landlord who should arrange for asbestos surveys to be undertaken and provided to the tenants.

Failure to comply with these regulations constitutes a criminal offence and can result in a fine and / or imprisonment.

Fire safety

The duty to carry out a fire risk assessment falls on the ‘responsible person’ under the Regulatory Reform (Fire Safety) Order 2005. The ‘responsible person’ includes the ‘owner’ who would be the landlord as they would receive the rent under the lease. However, if the tenant sub-lets, the tenant would also constitute the ‘owner.’

Gas and electricity

There is no statutory obligation for landlords to provide gas and electricity certificates to a tenant before granting a lease of commercial premises.

Under the Gas Safety (Installation and Use) Regulations 1998 (Gas Safety Regulations 1998) landlords must check anyone carrying out works to gas appliances or flues are registered on the Gas Safe Register. This responsibility can be passed onto the tenant but if the tenant fails to comply with this obligation, the landlord will remain liable. Failure to check whether the person is registered would constitute a breach of the Building Regulations 2000 and the Gas Safety Regulations 1998.

There a number of statutes which govern electrical maintenance and the combination of these mean that the responsibility to inspect and test all electrical equipment falls to the employer and not on the landlord or the tenant of commercial premises. However, if the tenant is an employer, they will be responsible for testing portable appliances. The lease will often contain provisions that the tenant is responsible for complying with all laws for machinery and equipment at the premises, in which case the tenant would have the responsibility for ensuring they are compliant.

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