Managing Partner
The legal relationship between a property owner and a tenant is an important one and, subsequently, commercial leases are some of the most critical contracts in the business arena. A commercial lease establishes the corresponding responsibilities of both the landlord and tenant. While lease negotiations may lead to delays in the legal agreement’s execution, they can also be important in protecting the respective interests of the parties as well as clearly establishing the rights and responsibilities of both the landlord and the tenant.
What is a Landlord Responsible for in a Commercial Lease?
In regard to a residential property, whether it be a home or apartment building, it is usually the landlord’s responsibility to carry the costs associated with the maintenance and operation of the building. In some instances, the landlord may even pay for gas and water fees instead of the tenants carrying such costs. On the other side of things, in a commercial lease, many of the costs associated with a building end up being transferred to the tenant and billed as additional rent. This is a rental fee on top of the base rent rate.
The landlord’s responsibilities in the landlord-tenant relationship should be detailed in the commercial lease. The terms should be carefully spelled out so that the tenant and the landlord understand their relative rights and responsibilities. For example, the commercial lease should state which party is responsible for:
- Ensuring the facility is in full compliance with both state and local building codes
- Meeting minimum energy efficient standards
- Making structural repairs to the building
- Managing any potential asbestos outbreaks
- Covering the cost of maintaining commercial property insurance
Generally speaking, the landlord in a commercial lease will be responsible for maintaining the integrity of a building’s exterior. This includes maintaining the roof and exterior walls. It also often includes responsibility for snow and debris removal on sidewalks that surround the building. In some cases, however, a commercial lease will shift these responsibilities onto the tenant. Within a commercial lease, a landlord may even delegate responsibilities of complying with the Americans with Disabilities Act. Getting the building into compliance could be costly and total thousands of dollars.
Again, generally speaking, a landlord will usually carry the responsibility for maintaining the structural integrity of a building. This would make the landlord responsible for maintaining the foundation of the building in addition to the walls and the roof. Furthermore, landlords, pursuant to the commercial lease, will often carry the responsibility of maintaining key systems in the building, such as the heating, electrical, and ventilation systems.
Landlords will often prefer to retain control of seeing to the major repairs a property may need. Failure to make such repairs can, of course, lead to liability exposure and be financially costly if not properly attended to. It is permissible, however, for a landlord to allow a tenant to address structural issues in regard to property.
Work With a New York City Real Estate Attorney
Make sure your best interests are protected in your commercial property lease. Woods Lonergan’s real estate attorneys can develop a strong commercial lease agreement that clearly spells out the rights and responsibilities of everyone involved. Contact us today.