The world of commercial property can be fast-moving. Commercial landlords need to be looking out for what new tenants might be wanting from their new home, whilst also ensuring that they are meeting current governmental regulations. But it does not stop there. Commercial landlords that are looking to be the most successful, both in renting their commercial property and in securing their future, should also be continually looking at regulatory changes and trends to get ahead of everyone else. Here at Boxpod Commercial Property, we understand what is needed from commercial landlords, and in this article, we are going to look at regulatory compliance in commercial property, and why landlords should be looking to get ahead of the game.
Increasing amounts of pressure are being put on businesses to ensure that they are working within environmental and safety regulations – such as EPCs, sustainability targets, and the health and safety of staff and visitors. Although not exclusively, a lot of these requirements relate to the commercial property in which the business is based, and, consequently, they can fall partly within the remit of the commercial landlord.
What Regulatory Compliance is the Responsibility of Commercial Landlords?
When a commercial landlord is looking to rent their property, it is important to understand what their responsibilities are. For most, it is not simply about finding a tenant and collecting the money every month; being a commercial landlord comes along with a set of landlord obligations. These include meeting regulations relating to utilities, the safety of tenants, and meeting standards of energy efficiency.
For commercial tenants looking for a new property, these regulations are important because they ensure that they are both protected from a financial and health and safety point of view, but also able to satisfy their legal and internal responsibilities regarding their impact on the environment.
By keeping this in mind, commercial landlords can better understand what potential tenants want, enabling them to go on and attract the best tenants and negotiate the best lease.
What are the Main Regulations for Commercial Landlords to Keep Up to Date With?
It does, of course, go without saying that commercial landlords should be aware of what their responsibilities and obligations are at all times, but especially when renewing a commercial lease or getting new tenants for their property.
In order to stay as competitive as possible, however, it can be useful for commercial landlords to try to stay ahead of the curve when it comes to regulations. This not only can help the property to stand out against the others when it comes to listing a commercial property, but it can also help to save money and unnecessary stress if or when regulations do change.
Across the commercial property industry, there are three main areas where regulatory change can (and does) happen often, and these are closely linked to governmental priorities at the time. As the world faces up to energy issues and climate change challenges, there is now an ever-greater need for energy-efficiency and sustainability regulations, as well as measures to be taken that can protect places of work from extreme weather conditions. In addition to this, ensuring that workplaces are safe and not detrimental to the physical or mental well-being of those inside them is also becoming increasingly important.
For these reasons, there appear to be three main areas in which it is recommended that landlords ideally stay on top of the regulations and act in advance, saving money and attracting good commercial tenants.
For most commercial landlords, the best time to carry out these updates would be between tenants, in the preparation of your commercial property for occupation, to avoid as much upheaval as possible.
Health and Safety Regulations for Landlords
Health and safety regulations are, of course, integral when leasing a commercial property. The strict regulations must be followed at all times to help to ensure the well-being of anybody who is in the building. It is essential that commercial landlords understand what their responsibilities are, relating to health and safety within their property.
One area of health and safety that has particularly come under the spotlight recently is fire safety. As we gain greater knowledge about fire safety, and following a number of tragedies in buildings with fire, regulations relating to fire risk are continually being tightened. Whereas buildings used to be surveyed mainly to ensure that there are fire alarms and fire escapes, fire inspections are much more detailed now.
For commercial landlords, it can be a good idea to check the most recent fire regulations to ensure that you are conforming to these. However, governments will also publish upcoming changes, so it can save stress, time, and often money by getting ahead of the others and making these adjustments as well. It can often be cheaper to carry out work when demand is lower, and it will also make the property more attractive to potential tenants.
Energy-Efficiency and Sustainability Regulations for Commercial Landlords
Energy-efficiency regulations at the moment in commercial property revolve around the EPC (Energy Performance Certificate) and MEES (Minimum Energy Efficiency Standards) regulations. These relate to the commercial property’s energy-efficiency standards and green credentials. Some of the measures that are assessed include insulation and boiler efficiency, as well as lighting and ventilation.
Once an inspection has been carried out, the property is given an energy-efficiency rating. The government uses this rating to ensure that commercial properties are meeting the required standards, and as time goes on, the standards are increasing. The inspection also gives recommendations of what measures could – or should – be carried out in order to improve the rating, and it is important for commercial property landlords to look into this, as the standards rise.
Landlords should check when the rating is set to rise, to ensure that the measures are carried out in good time before they do so. Again, this will help to avoid stress, unnecessary expense, disruption, and make the property more attractive to potential tenants.
Climate Resilience for Commercial Landlords
As climate change begins to take hold, we are getting – and will continue to get – increasingly hotter and drier summers, and wet winters. This means that all properties need to be better prepared for these more extreme weather conditions, including commercial properties.
Some of the measures considered in the energy-efficiency and sustainability regulations can help towards this. Insulation, for example, is effective for energy saving because it can help to keep extreme heat out in the summer, as well as keeping the extreme cold out in the winter.
There are a number of issues that commercial landlords should be looking at when it comes to the climate resilience of their commercial properties:
- Ventilation and inside temperature control, including the potential for zoning, in both areas where staff and visitors are based, but also plant rooms, server rooms, etc.
- Analysing the potential for overheating – the direction of windows, etc., and taking measures – the installation of screens or blinds, and other cooling strategies, for example.
- Electrical capacity – especially if you are considering additional cooling, heat pumps, electric car charging, etc.
- Water and drainage – susceptibility to flooding, ensuring adequate drainage around the property
Some ideas that commercial landlords can use in order to help to improve the climate resilience of a property include looking at smart technology for heating and cooling systems, landscaping for flood defences, and installing low-flow water systems.
Final Thoughts
It goes without saying that commercial landlords need to be on top of the current regulations relating to their properties. However, by being ahead of the curve with regard to what regulation changes are to come, landlords can both save money in the long run, potentially saving money as regulation change deadlines get closer, and also make the property more desirable to potential tenants.
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