Always Remember These Four Things When Letting a Commercial Property...
Buying a commercial property can offer you great returns both in terms of income and capital growth. However, once you have completed on your commercial mortgage and taken ownership of the property you then have to worry about leasing the property, which will often be done through a commercial letting agent.
Although your agent may look after much of the specific details of the letting, there are certain responsibilities that you retain as the landlord of the property. Our guide outlines four of the most important things you should know when letting a commercial building.
Landlord Works: Prospective tenants will generally have several properties to choose from. So, the work that you are prepared to do on your property could be the difference between them signing your lease and a lease on another building.
When letting a commercial property you have to decide whether you are prepared to assist a prospective tenant by undertaking landlord work on the building. For example, the tenant may require kitchen or shower facilities to be installed, or need bicycle racks or allocated parking spaces.
Energy Performance Certificates: An Energy Performance Certificate (EPC) is a report that shows the energy efficiency of a commercial or residential building. As a landlord of a commercial property it is a legal requirement that you provide an EPC to your tenants or prospective tenants. Bear in mind that whilst you may only pay around GBP50 for a residential EPC you may pay GBP300 to GBP400 for an EPC on a large commercial property.
It is the job of Trading Standards to enforce regulations relating to EPCs and there have been instances of landlords falling foul of these laws. If a tenant or prospective tenant does not receive an EPC you can run the risk of a fine and, of course, you are likely to lose your tenant.
Disability Discrimination Act: Assessing he needs of people with disabilities and taking reasonable steps to ensure that disabled people have good quality access to a commercial property is one of your major responsibilities as a landlord. You are obliged by law to comply with the Disability Discrimination Act, particularly if your tenants plan to open up the premises to the general public.
The requirements under the Disability Discrimination Act will already have been considered if your property has been recently renovated or modernised. Both planning consent and building regulations will have taken these issues into account. In addition, your tenant will be required to comply with all laws and regulations regarding this issue when they sign their lease. So, as a landlord you should be prepared to allow tenants to undertake any work necessary to bring the property in line with these regulations. This may include building access ramps or modifying communal areas such as hallways.
Asbestos Survey: Asbestos in the building can pose a health risk to your tenants and to people working in the property. So, as a landlord you will have to carry out an asbestos survey to determine whether there is any asbestos in the building. If asbestos is discovered, a report will have to be prepared outlining how risks to the tenants can be minimised or how you intend to remove the asbestos from the premises.
If you fail to comply with the laws and regulations relating to your commercial property, the repercussions could be significant. So, it is vital that you take the above four issues into account when letting your commercial property and understand your duties and responsibilities as a landlord.
About the Author:
Howard O'Gollegos writes for Just Commercial Mortgages the UK's No1 site for the latest commercial mortgage rates and commercial property finance news.
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