News & Insights
You sign your commercial lease, you pay your rent and service charge, and you imagine that the landlord is going maintain the building and make sure everything is okay.
But there is nothing in the contract about the level of service the landlord should provide. Nothing about what happens if something breaks down, how quickly it will be repaired and what is an ‘acceptable’ level of maintenance.
There is nothing that gives commercial tenants any kind of protection or guarantees. Commercial property isn’t like any other industry.
If you book a holiday and there is a problem, there are certain protections in place to minimise the disruption or compensate you for the inconvenience.
Similarly, if you buy a new car and the air conditioning isn’t working, the dealership will want to fix it quickly to minimise any inconvenience.
Problems with a building can be detrimental to a tenant’s business. If the air conditioning doesn’t work properly, making the working conditions unpleasant, then staff might get fed up and leave.
Leases set out obligations, what you can do and what you can’t, but they don’t set out how quickly the air conditioning should be fixed or what level of air-conditioning is acceptable and what happens if it doesn’t meet certain standards.
Commercial leases have evolved over the decades but remain in the landlord’s favour. Tenants often rely on the goodwill of landlords to deliver a certain service level, and that can be driven by commercial incentives such as how easy the space is to let.
Now it isn’t completely one-sided. There are rogue tenants as well as rogue landlords, and a lot of the clauses in leases are put there, no doubt, from bitter experience. But it should be quid pro quo. If the tenant is fulfilling their obligations and occupying the space in a professional and responsible manner, then their landlord should behave accordingly.
Leases need a reciprocal document that sets out the level of service that will be provided for commercial tenants in terms that clearly define what is ‘acceptable’. Currently, if there is a disagreement between a landlord and tenant about what is ‘acceptable’, it can end up in a costly and time-consuming court case.
A survey commissioned by the CTA found that 47% of commercial tenant felt their interests weren’t represented in the commercial property market, and 45% felt their landlords did not care or take an interest in their business.
We need to redress the balance and make leases work fairly for landlords and tenants.