When leasing space to business tenants, investors and business owners understand maintenance responsibilities are key to keeping tenants happy and play a part in long-term tenant retention. How well a building is maintained directly reflects an owner’s commitment to creating a positive space in which business tenants can work productively.
Commercial Property Maintenance Responsibilities When Leasing to Tenants
There are several categories of maintenance and repairs for commercial properties. To attract the best possible business tenants and retain them, keep up with all areas of maintenance and portray excellence in the details.
1. Preventative Maintenance
A thorough preventative maintenance schedule is essential to ensure the longevity of the asset and minimize expensive emergency maintenance. Periodic inspections by management is the first step in preventative maintenance.
Landscaping, pest control, quarterly HVAC service, and other routine maintenance is the next step in maintaining a sound investment property. Even if the tenant is responsible for certain maintenance, verification that those services are performed protects you from liability and protects your investment. Always be sure maintenance responsibilities are clearly assigned to each party in the Lease Agreement.
2. Routine Maintenance
Like clockwork, various aspects of a commercial property need to be maintained on a schedule. Sticking with the recommended intervals for attending to these items preserves the building and often delays the need for major repairs. Routine maintenance includes things such as:
- Weekly landscaping, lawn care, and exterior upkeep
- Monthly air filter changes
- Seasonal servicing of heating and air conditioning units
- Periodic checking that smoke detectors and carbon monoxide detectors are working well for the safety of your tenants and the property. Keep batteries within these items up-to-date.
3. Scheduled Repairs
When something breaks or doesn’t work as it should, schedule repairs in a timely manner. The roof and major systems should be inspected systematically and repaired or replaced as needed. Schedule repairs such as:
- Repair or replace roofing if it leaks, or shingles are missing.
- Repair the property’s foundation if it becomes compromised.
- If any additional major maintenance needs arise, property owners should address them to prevent additional damage and maintain the safety of the commercial property.
4. Construction or Remodeling
Asset improvement projects – tenant remodels or capital upgrades – require experience and planning. Changes to the building codes (locally and internationally), permit applications, ADA standards, and business specific requirements for occupancy can have a significant impact on the cost of a project. A team with strong industry connections and a solid knowledge base can be the difference between finishing on-time and on-budget and a substantial loss of income.
5. Emergency Maintenance
Even with adequate preparation, emergencies will still occur. However, if your management team has a plan in place the emergency need not become a crisis. Water, fire, and severe weather can cause major damage, but being prepared to respond and address emergencies can significantly minimize costs and recovery times.
6. Commercial building fire and safety code compliance
The commercial building must satisfy state and local requirements for commercial construction. The building should be free of environmental hazards such as lead paint, lead-contaminated dust, asbestos, and chemical contaminants.
Improve Tenant Retention
Investors and business owners are keenly aware that building maintenance is no place to cut corners. Tenant retention is more likely to be long-term when you:
- Stay ahead of routine maintenance
- Build relationships with trusted contractors to call when you need them
- Address tenant complaints and emergencies with prompt action
Get It in Writing—Make Expectations Clear in the Lease Agreement
It’s important that both the investors or business owners and the business tenants understand which maintenance responsibilities are theirs and which are the other party’s. Leave no room for assumptions, and assign each aspect of the building’s maintenance to the responsible party. Outline maintenance responsibilities in the lease agreement.
Tenant Responsibilities for Building Maintenance
As a business tenant, there are some things you shouldn’t do:
- Don’t do any major remodeling or remove walls without permission.
- When it comes to the property, don’t be careless.
- Don’t be a nuisance, difficult, or unreasonable with the neighboring businesses.
Business tenants should do the following unless outlined specifically in the lease agreement:
- Clean nonstructural elements such as carpets, lights, bathrooms, and fixtures to keep them in good condition.
- Dispose of trash properly, deterring pest infestation.
- Avoid deliberate or negligent damage to the property.
- Inform the owner of needed repairs in a timely fashion.
- If the property floods due to the hot water heater rusting out or bursting, it’s critical that immediate action be taken in order to minimize damage and get things back into working condition.
- If a pipe bursts, let the owner know promptly.
- If an appliance acts up and it is part of the lease agreement, communicate the problem as soon as possible to minimize any inconvenience.
- Return the property in the same condition it was in when you moved in.
- Leave the property clean and free from damage so you aren’t charged for its condition.
- Understand that if you cause property damage, you are responsible for financing the repairs. For example:
- Broken windows
- Damage to the drywall
- Excessive carpet damage
- Some tenants replace air filters regularly at the direction of the owner.
- Inform the commercial property owner of any mold growth.
- Landscaping responsibilities should be discussed prior to signing a lease.
Simplify Commercial Property Management
Delegating property management tasks allows you to stay focused on growing your business while assigning the hassles of commercial property management to a trusted source.
McGraw Commercial Properties offers commercial property management services which free up your time so you can invest more and grow your business. See our Property Management Services. Call us and tell us about your CRE needs.