The Top 5 Commercial Landlord Responsibilities

Posted by Pekin Insurance on Dec 30, 2015

Learn which commercial landlord responsibilities are the most important so you can be the best at what you do

What are the most important commercial landlord responsibilities to uphold? Here are our top 5 choices

Leasing or renting out a commercial property can be a profitable business venture. Although it may look easy from the outside, the truth is that landlords have many different responsibilities. A strict commitment to meeting standards and tenants' needs is only one part of the entire picture. 

The most crucial commercial landlord responsibilities are local and state regulations, duty to care, protecting your investment, and shielding yourself from liability. These standards are universally expected and, if met consistently, will give your business a good chance for success. 

The top 5 commercial landlord responsibilities

1. Compliance with building codes 

State and local governments require commercial property owners to comply with standards of safety, habitability, and accessibility. Depending on the current state of the building, landlords will need to fix and adjust issues before leasing or renting out space.

Compliance is not a one-time deal, either. Building codes have sections and specifics that change over time, so it's important to keep up to date and have your property regularly inspected.

Landlords who don't meet certain standards and decide to lease anyway will face serious legal repercussions. Whether due to ignorance or negligence, non-compliance will have a negative impact on businesses. 

2. Negotiating clear terms for the lease agreement 

When drawing up a lease for a potential tenant, it's crucial that both parties agree to and fully understand their responsibilities under the contract. There is no "master template" for landlords to use; every situation is different. If you're a first-time commercial landlord, it's wise to hire a third-party to draft the lease and negotiate terms for you.

When delegating certain maintenance responsibilities, here are a few questions to consider: 

  • Who will be accountable for cleaning the leased out space? 
  • What alterations can the tenant make? 
  • What are the repairs the tenant should be responsible for? 
  • What is considered a timely response for minor repairs? 

3. Minimizing risk and liability 

The bottom line is to protect your investment. Water damage, break-ins, faulty equipment—there are never too many preventative measures to take to prevent a disaster. The amount of work to prevent loss and damage will have a direct influence the quality of your insurance coverage, safety guards, and more. 

On a consistent schedule, you should be inspecting these areas of risk: 

  • Locks on doors and windows
  • Security systems and cameras
  • Roofing and paneling 
  • Electrical and heating units
  • Smoke and fire alarms 

4. Duty to maintenance and repairs 

According to the terms of the lease agreement, there will be commercial landlord responsibilities for maintenance. Not only are you required to make repairs, but also to perform these tasks promptly. Being responsive to faulty equipment shows good standards of management and protects your business from damage

Common commercial landlord responsibilities include: 

  • Heating and air conditioning 
  • Removal of waste and hazardous materials
  • Electrical units 
  • Communal areas, such as bathrooms and hallways 
  • Window and door security 
  • Water faucets and piping 

5. Attaining diverse insurance coverage

State laws require landlords to have insurance for their buildings. Commercial property insurance will cover losses and damages to the building, as well as the equipment inside, such as computers. 

However, you have to consider what general liability and property insurance does not cover. For instance, a tenant may sustain an injury in the building and blame it on the lack of proper lighting. Lessor's risk insurance will add coverage for these types of situations and give more peace of mind to landlords.

If you're seeking general liability or commercial property insurance, we can help. Check out the Pekin PAK program, which includes Lessor's Risk insurance. We offer competitive rates and combined policy packages for our customers, plus preferred rates for qualified commercial property owners. Are you prepared for accidents? Give us a call or request a quote for more information.

What other responsibilities can we add to the list? Share your thoughts and expertise in the comments!


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