Statutory Obligations under Commercial Leases

Fire Risk Assessments and Asbestos Surveys
Legal requirements, known as statutory obligations, are often imposed within commercial leases. Such obligations include the non-exhaustive list of:

The question of whose responsibility these obligations fall to, either the landlord or the tenant, will be determined by the terms of the lease or that which has been laid down in legislation. It is therefore important to understand who is responsible for these provisions so that certain health and safety standards are satisfactory. This article will focus on the common statutory obligations of Asbestos Surveys and Fire Risk Assessments.

Asbestos Surveys
The Control of Asbestos at Work Regulations 2006 (2006 Regulation) impose a duty to manage asbestos in non-domestic premises. The Regulations impose a legal duty on those that are in control of the maintenance and repair of any part of non-domestic premises to make an assessment (the Asbestos Survey) as to whether asbestos is present or is likely to be present. If asbestos is present, they are required to prepare a plan for managing the health risks arising (the Management Plan) and keep this up to date as necessary.

Within a standard full repairing commercial lease (FRI Lease), in which the tenant takes on all of the costs for repairs and insurance for the property being leased from the landlord , the tenant will usually be responsible for managing asbestos within the premises. This is because the law places the responsibility on the person that has the most control over the premises. As tenants under FRI Leases have full repairing and insuring responsibility it is then unlikely that the landlord will manage the asbestos, especially where they do not have occupation of the premises.

Accordingly, it is important that, before a tenant takes a lease, an asbestos survey is obtained from the landlord, so as to check whether there is any asbestos present within the premises and if there is, what asbestos management the tenant will become responsible for.

However, the responsibility under the 2006 Regulation for managing asbestos within the premises may fall to the landlord. Such a circumstance includes where the landlord has clear responsibility for the maintenance or repair of the premises under the terms of the lease.

Where there is no plan in place to deal with asbestos this will breach the duty under the 2006 Regulation. This could cause a breach of the lease and in more extreme cases punishments such as fines and imprisonment may be applicable. It is therefore important to determine who will be responsible for the asbestos survey under the lease.

Fire Risk Assessment
The Regulatory Reform (Fire Safety) Order 2005 (2005 Order) requires persons responsible for properties (except private dwelling houses) to prepare a Fire Risk Assessment. The ‘responsible person’, as with the asbestos survey above, will be any person who has control of the premises.

Where the lease in question is a FRI Lease of whole, the tenant will likely be the responsible person assuming that they have control of the premises. This will mean that the tenant is accountable for responsibilities such as:

  • Carrying out the risk assessment
  • Ensuring that the premises and any fire safety equipment are kept in working order
  • Determining whether there are sufficient emergency exits and procedures in place
  • Providing any necessary fire safety training any employees

As long as the lease is in effect, the tenant’s responsibility for the Fire Risk Assessment will not extinguish when the tenant vacates the premises. As such, it is recommended that a Fire Risk Assessment should be obtained before a tenant commits to a new lease in case works to the premises are required to satisfy the specifications of the 2005 Order.

However, the landlord may be considered the ‘responsible person’ where they have an obligation in respect of maintenance or safety within the lease terms, or where they have control over the premises. Such control might include the landlord’s capacity to access the premises to carry out any maintenance or repair works under the lease. Furthermore, where the demised premises has multiple lettings, the landlord may be responsible for the common areas. It should also be noted that the landlord may take back control of the premises from the tenant where the lease is surrendered or forfeited.

Where the Fire Risk Assessment responsibilities under the 2005 Order are not satisfied, depending on the severity, this could result in a breach of the commercial lease, fines, and in extreme cases even prison. As such, it is important to understand who under the lease is the ‘responsible person’.

There is a vast range of health and safety commitments under leases which are imposed by statutory obligations. A breach of these obligations may result in consequences for the responsible party. Accordingly, whether you are a landlord granting a lease or a tenant taking a lease, it is important to understand who under the lease has control of the premises as they may be responsible for statutory obligations such as the Asbestos Survey and Fire Risk Assessment. 

Please contact us to speak to a member of our Real Estate team.

Rachel Duncan
Partner, Real Estate
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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