Taking a Commercial Lease: The Compliance Checks to Do Before You Sign and in Week One

A lease negotiation is about rent, term and repairs, and compliance rarely gets a line. Yet the day you take occupation, most of the safety duties in the building become yours, along with whatever state the previous occupier left them in. Ten minutes of questions before you sign can save a five-figure surprise after. Here is what to ask for, what to check and what to do in the first week.

What to ask the landlord for

• The EPC. It must exist and show E or above for the letting to be lawful under MEES. Check the expiry date against your term.
• The asbestos register and management plan for any pre-2000 building, which the landlord must hold under regulation 4 if it maintains the fabric. You will need it before any fit-out.
• The last EICR for the installation you are taking over, and its recommended next date.
• The gas safety record for any appliances in the demise or serving it.
• The fire risk assessment for the building and its common parts, and the fire strategy.
• The TM44 report if the air conditioning is over 12kW.
• Service and maintenance records for anything you will be responsible for under the repairing covenant.

A landlord who cannot produce these is telling you something about the building.

What to check yourself

The repairing covenant. A full repairing lease makes you responsible for keeping the demise in repair, which usually brings the compliance duties on its fabric and services with it. Our guide to lease negotiation covers the clauses that matter.

The condition. A schedule of condition appended to the lease caps your repairing liability at the state you inherited and records the compliance position on day one. Without it you can be asked to hand back a better building than you took.

What the fit-out will disturb. If you are altering anything in a pre-2000 building, a refurbishment asbestos survey of the affected areas is required before works start, and it is cheaper to commission it now than to stop a contractor later.

The due diligence checklist covers the wider survey questions.

Week one: the duties that start on day one

From occupation you are the employer in the premises and the responsible person for the space. In order:

1. Fire risk assessment for your demise, before staff move in or at the latest in the first days, with extinguishers, signage and escape routes checked against it.
2. Electrical. If the landlord's EICR is missing, old or unsatisfactory, book your own. Add PAT testing for the equipment you bring in.
3. Gas. If there are appliances in your demise and no current record, book an inspection.
4. Water. Flush outlets that have stood unused and commission a legionella risk assessment for the systems you control.
5. Records. Start one register with everything the landlord gave you and everything you commission.

Using what you find

Compliance gaps found before signing are negotiating points: a rent-free period to cover works, a landlord obligation to bring the EICR or EPC up to standard before completion, or a reduced repairing obligation on plant that is already at the end of its life. Found after signing, they are simply your cost.

Checking a unit before you commit

The free compliance check works for a building you are about to take as well as one you already occupy. Answer seven questions about it and you get the list of duties that will be yours, with a quote for each, so you walk into the negotiation knowing what the building needs.

Sources & further reading

• GOV.UK: non-domestic minimum energy efficiency standard — the E rating needed to let
• Control of Asbestos Regulations 2012, regulation 4 — the asbestos register and plan
• RICS: Code for Leasing Business Premises — what a fair lease negotiation covers

External links open in a new tab. ComSurv is a matching service, not a firm of surveyors, and is not affiliated with these organisations. This article is general information, not legal, surveying or valuation advice; take advice on your specific situation.