EICR - Commercial Lease

[MadeinShropshire]

I recently received the following email from the agent acting on behalf of my landlord on my office lease:

"Health & Safety Compliance
We write to remind you of the requirement in your lease that you must maintain the premises and comply with all legal and statutory obligations such as the Health & Safety at Work Act 1974 and the Electricity at Work Regulations 1989. You must also meet the requirements the building insurers who will expect best practice, compliance with the law, and a safe and well maintained building.
Our records indicate that an up to date EICR is required from you.

• Electricity. An Electrical Installation Condition Report is a formal document that is produced following an assessment of the fixed wiring electrical installation within a property. It must be carried out by an experienced qualified electrician who will issue the report that is usually valid for 5 years.

An EICR will check whether your premises has faults that cannot be identified through a visual check. If serious faults are found the EICR will be classed as “unsatisfactory”. You must repair such defects and obtain a “satisfactory” certificate.
You should also ensure that all portable appliances are regularly inspected and PAT tested."

Looking through my lease, is this referring to the following clause:

"30. Compliance with Laws
30.2 Without prejudice to any obligation on the Tenant to obtain any consent or approval under the lease, the Tenant shall carry out all works that are required under any law to be carried out at the property whether by the owner or occupier."

From reading the Government's website the requirements only appear to apply to tenants in private rental accommodation, not for a business:

"3. Which rented properties do the Electrical Safety Regulations apply to?
The Regulations apply in all cases where a private tenant has a right to occupy a property as their only or main residence and pays rent. This includes assured shorthold tenancies and licences to occupy."

We are at the very end of our 6 year commercial lease which was signed in 2016 and this has never been brought up before.

Any thoughts appreciated.

 

[MBE2017]

One needs to be done every five years in law. Your solicitor should have pointed out such requirements when you took out the lease, let’s hope any repairs are not too costly.

 

[WaveJumper]

As above yes (of course depending on what is in a tenants lease) lot of useful info on the topic here

How is a commercial landlord responsible for electrical safety? - Commercial Property Management London | Martin Slowe

As a commercial landlord you have a legal duty of care to any commercial tenants who lease your property. By law, you are liable to ensure that all electrics installed within the property pose no risk to a tenant’s health and safety. The responsibility for removing any hazards and arranging any...

www.martinslowe.com

 

[MadeinShropshire]

Thank you very much - I think the government website needs to be clearer therefore, that it covers business tenants as well as residential properties.

I guess with a commercial lease it is easier for a landlord to transfer their responsibility (and cost!) on to the tenant.

"30. Compliance with Laws
30.2 Without prejudice to any obligation on the Tenant to obtain any consent or approval under the lease, the Tenant shall carry out all works that are required under any law to be carried out at the property whether by the owner or occupier."

 

[Gyumri]

I guess with a commercial lease it is easier for a landlord to transfer their responsibility (and cost!) on to the tenant.

Not necessarily unless the location is deemed profitable for a tenant. Commercial leases have to be negotiated like anything else.

 

[kulture]

Not necessarily unless the location is deemed profitable for a tenant. Commercial leases have to be negotiated like anything else.

Firstly in this case there is a lease, so that is where the OP should base their actions on.

Secondly the wording displayed here seems over general and any solicitor should have warned against signing such a lease.

Thirdly it is very rare indeed to find a landlord willing to take on internal utility safety liability and certainly not without a clause limiting any electric works in the property without permission.

It is much more likely that the tenant did not use a solicitor,and potentially the landlord didn’t either.

 

[MBE2017]

It is much more likely that the tenant did not use a solicitor,and potentially the landlord didn’t either.

Reckon you are on the money, most lease problems come down to not having taken independent legal advice.

I guess with a commercial lease it is easier for a landlord to transfer their responsibility (and cost!) on to the tenant.

No, they have a standard lease which is in their favour, and they hope you do not get legal advice and negotiate. The Gov feel yourself being a business person has enough of the grey matter not to just sign what is put in front of you, otherwise you get nasty surprises like this. They prefer to treat you like an adult.

 

[The Byre]

1. Where in your lease is there any mention of an EICR being performed every five years?

2. Have you made any alterations to the electrical installations of the property?

3. There is no formal legal requirement to perform PATs and these may and indeed should be performed by a suitably qualified person, i.e. any Joe Blow including your good self - or a friend with the required knowledge.

 

[Frank the Insurance guy]

In my experience it is common practice for the tenants to be responsible for the Health & Safety of the premises included the electrical inspection reports.

Assuming you are on a full repairing lease, any requirements/improvements as a result of the electrical report will be down to you.

I come across this all the time when talking to business customers on their insurances - the electrical inspection needs to be done every 5 years.

 

[MBE2017]

1. Where in your lease is there any mention of an EICR being performed every five years?

It is a legal requirement, the only thing required on the lease is who is responsible, as Frank mentioned above, most leases tend to be full repairing ones, which is why taking legal advice before signing is so important.

 

[WaveJumper]

Agree with the above taking legal advice before signing any document you don't fully understand is important and will almost certainly save you money and a lot of heartache in the future. Having worked in the commercial property game for many years we would not let any tenant sign a lease unless they had received legal advice.

Also other than the above we would never have ever issued a lease which did not stipulate a tenant had to have landlord approval for any works they were going to carry out and that included full shoplift out plans before they even got started.

And yes we would want to see copies of electrical inspection, fire alarm service records etc etc.

 

[The Byre]

It is a legal requirement, the only thing required on the lease is who is responsible, as Frank mentioned above, most leases tend to be full repairing ones, which is why taking legal advice before signing is so important.

Electrical safety regulations changed in 2019, requiring landlords to get an electrical safety certificate every five years. Landlords and not tenants! Without reading the complete lease, which may of course stipulate another arrangement by placing this specific requirement on the shoulders of the tenant, it looks as if the landlord, or rather their agents, are trying to worm their way out of this obligation with that letter.

 

[MBE2017]

@ The Byre, I am glad we are in agreement.

 

[The Byre]

Having worked in the commercial property game for many years we would not let any tenant sign a lease unless they had received legal advice.

It is in fact under common law a requirement that a very much weaker party receive proper legal advice before signing a contract, for that contract to be enforceable. For example, when an actor or musician signs a binding agreement with an agency or a record label, where the stronger party is a large business such as Universal Music or Viacom who have fleets of lawyers who specialise in entertainment contracts.

Under the statute law such as exists in Germany, France and Holland, etc., there are rules governing who is and is not fully competent. German law differentials between a Vollkaufmann, Sollkaufmann, Kannkaufmann and Formkaufmann (full- should- could- and structural-business). Each has its own levels of competence and responsibilities. A private person is deemed to have the lowest levels of competence and responsibility, the next one up is the sole trader - and so on!

All good fun - and gives one lots to learn in business school!

 

[Frank the Insurance guy]

Electrical safety regulations changed in 2019, requiring landlords to get an electrical safety certificate every five years. Landlords and not tenants! Without reading the complete lease, which may of course stipulate another arrangement by placing this specific requirement on the shoulders of the tenant, it looks as if the landlord, or rather their agents, are trying to worm their way out of this obligation with that letter.

That may be the case for residential, but this post relates to a commercial office space. I don't think your statement above applies to commercial premises?

Having worked with many businesses, many of whom are tenants, they have been the ones responsible for electrical safety certificates. The clever ones would have negotiated with the landlord as part of the lease that there is a current certificate in place, which then means they do not need a new certificate until year 5 of the lease!

Depending on any fit out etc the tenant carries out, this may lead to a fresh certificate being required when the work is done (ie. they cannot wait the 5 years!) - which is usually the responsibility of the tenant, not the landlord.

 

[The Byre]

That may be the case for residential, but this post relates to a commercial office space. I don't think your statement above applies to commercial premises?

You are of course correct - commercial properties fall under different rules, such as public liability and employer liability.

So I did a bit of research -

The '85 act places overall responsibility for general safety on the owner or landlord first and this extends to fire, asbestos, gas, etc., etc. A commercial tenant on the other hand may be placed in a position of responsibility if there are customers or employees using the property, depending on the nature of that use. For example, we often have children using our properties, so we get a general H&S test once a year.

BUT

The Landlords and Tenants Act of '85 contains clauses on electrical safety in rented commercial property. Section 8, parts a) & b) of the Act, the electrical installation must be safe when handed over and maintained in a safe condition for the entire duration of the tenancy. Unless otherwise contracted, this obligation rests with the owner or landlord.

How those standards of safety are ascertained is not stipulated.

Other relevant legislation that applies to electrical safety for commercial properties – the '57 Occupiers’ Liability Act and the '84 Occupiers’ Liability Act - state that owners have a duty of care towards anyone on or in their property and not just the tenant - and regardless of how that person came to be on their property.

If a landlord fails to adhere to electrical safety guidelines for commercial properties and someone is injured as a result, they may be prosecuted under the terms of these two Occupiers’ Liability Acts regardless of any other relationship they may otherwise have with the tenant.

The clever ones would have negotiated with the landlord as part of the lease that there is a current certificate in place, which then means they do not need a new certificate until year 5 of the lease!

The five-year certificate is (as far as I know at the moment) only a strong recommendation for commercial properties and not a legal requirement - failing to adhere to that recommendation, may however have legal consequences in cases of injury, esp. for the landlord. Various insurance covers may also become invalid if they clearly require a EICR - but that is a different issue entirely.

Depending on any fit out etc the tenant carries out, this may lead to a fresh certificate being required when the work is done (ie. they cannot wait the 5 years!) - which is usually the responsibility of the tenant, not the landlord.

And whoever completes such work must do so in compliance with the law. Again - the various bits of legislation are a bewildering array of recommendations and warnings of fines and other consequences in cases of gross negligence leading to damage or injury. Words like MAY and SHOULD abound, in place of clear and precise language.

And as usual, various interest bodies and lobby groups do their best to frighten the business community into complying with mere recommendations or with laws that either do not exist or do not apply to them. (PAT certification can be carried out by the dog, assuming that the dog is deemed to be suitably qualified - or a Great Dane!)

And the owners' agents have been suitably frightened into writing to the OP, stating that it is the OP's responsibility to comply with a law that applies to residential properties only - and even then, is a legal responsibility that a landlord cannot hand on to the tenant!

 

[Frank the Insurance guy]

@The Byre - you sir, are the font of all knowledge!

 

[Newchodge]

@The Byre - you sir, are the font of all knowledge!

ALL? Most, I can accept.

 

[rach88]

The Landlords and Tenants Act of '85 contains clauses on electrical safety in rented commercial property. Section 8, parts a) & b) of the Act, the electrical installation must be safe when handed over and maintained in a safe condition for the entire duration of the tenancy.

This is not entirely correct. The Landlord and Tenant Act 1985 (nb spelling) only applies to residential property. If you look at the statute, section 8 relates to implied terms for fitness for human habitation. These implied terms apply only for letting of "a house".

Occupier's liability - the duty is owed by the 'occupier'. A landlord is not an occupier of premises which have been let, see Essex County Council & Ors v Davies & Ors [2019] EWHC 3443.

 

[The Byre]

@The Byre - you sir, are the font of all knowledge!

Rubbish! I know absolutely nothing about the following subjects -

Aardvark husbandry.
The insurance market.
Valve radio circuitry (all my valve projects failed to work at tech college!)
The French cheese market.
Why people use Facebook, Instagram, etc.
Programming in C++
What our dogs really think of me.
Early Chinese cinema.
Why some men wear corduroy trousers.
Why Nicholas Witchell.
How to use a smart phone.

This is not entirely correct. The Landlord and Tenant Act 1985 (nb spelling) only applies to residential property. If you look at the statute, section 8 relates to implied terms for fitness for human habitation. These implied terms apply only for letting of "a house".

Which just goes to show that I should check things that people tell me! So much for being a font of anything - a pretty vaciuous claim if you ask me! "Go and ask the Byre!" they cry - no don't! He can't even operate a smartphone without getting a nose-bleed.

My stock (along with that of Peleton, Avid and DoorDash) is sinking rapidly today!

I shall now go and talk to my Great Dane 'Dexter' about the political situation in Russia - apparently he knows a dog that knows a Borzoi with links to the Kremlin . . .

 

[kulture]

There was also that wonderful clause
“Unless otherwise contracted….” Most Commercial landlords would have used solicitors to ensure that as much liability and responsibility passes to the tenant.

 

[WaveJumper]

@The Byre 'font' of knowledge has dried up .......must be due to the continuing drought conditions ?

 

[Michael Loveridge]

One needs to be done every five years in law. Your solicitor should have pointed out such requirements when you took out the lease, let’s hope any repairs are not too costly.

There is no specific legal requirement that a commercial property must have an EICR, so it follows that there is no requirement that one needs to be obtained every 5 years.

Although your obligations will be set out in the lease it appears, as is almost invariably the case, that you are responsible for maintaining the electrical system in good repair. So obtaining an EICR would be a relatively simple way of proving that you'd complied with your obligations.

However, in the absence of any evidence that the electrical system is not in good repair I can see no justification for incurring the expense of an EICR, and I'd therefore be inc,lined to reply to the landlord on that basis.

It is in fact under common law a requirement that a very much weaker party receive proper legal advice before signing a contract, for that contract to be enforceable.

Sorry to be blunt, but this is 100% wrong. There is no such requirement at all. Although there are laws that give some protection to vulnerable people in very limited circumstances there is certainly no general law to that effect. And when it comes to business to business contracts, as with a commercial lease, the law expects both parties to be fully aware of their legal obligations when entering into an agreement.

This is why lawyers exist. If someone chooses to enter into a legal agreement without legal advice then they have to accept the risk that they are signing up to a potentially very disadvantageous deal.

 

[The Byre]

There is no such requirement at all. Although there are laws that give some protection to vulnerable people in very limited circumstances there is certainly no general law to that effect.

Of course, there is no such law, but many cases of precedent in which unfair contracts between very unequal parties have been nullified. For example, several recording or acting contracts in which some poor sap signed away all their rights for a pittance. For that reason, record companies and studios require that those who sign a binding contract with them get proper legal advice. They do not want that arrangement to be later overturned.

And when it comes to business to business contracts, as with a commercial lease, the law expects both parties to be fully aware of their legal obligations when entering into an agreement.

That is a contract between equals.

 

[kulture]

Of course, there is no such law, but many cases of precedent in which unfair contracts between very unequal parties have been nullified. For example, several recording or acting contracts in which some poor sap signed away all their rights for a pittance. For that reason, record companies and studios require that those who sign a binding contract with them get proper legal advice. They do not want that arrangement to be later overturned.

That is a contract between equals.

Recording contracts are very different to commercial leases. For commercial leases there is a presumption that they are equal parties in business terms and it would be very very difficult to persuade a judge to rule otherwise. It certainly should not be relied upon.

Thus, as we always say here, no-one should sign a commercial lease without taking proper legal advice.

 

[MBE2017]

There is no specific legal requirement that a commercial property must have an EICR, so it follows that there is no requirement that one needs to be obtained every 5 years.

Although your obligations will be set out in the lease it appears, as is almost invariably the case, that you are responsible for maintaining the electrical system in good repair. So obtaining an EICR would be a relatively simple way of proving that you'd complied with your obligations.

However, in the absence of any evidence that the electrical system is not in good repair I can see no justification for incurring the expense of an EICR, and I'd therefore be inc,lined to reply to the landlord on that basis.

I stand corrected, you are correct, not a legal requirement yet on commercial, but certainly sensible.

Without a current EICR in place whoever in this case is responsible (normally the landlord), leaves themselves open to potential claims. With a current EICR it provides a safety net of sorts, one well worth the expense.

 

[WaveJumper]

Laws in England require businesses to comply with specific electrical safety standards to keep their property, customers, and employees safe. These regulations come under two headings:

Electricity at Work Regulations 1989 – Where employers must ensure their electrical systems are not only safe but safely installed and fully maintained. These systems must be fully monitored to check condition and the systems must have regular assessments and testing.

Then we have the Landlords and Tenants Act 1985 – Landlords of commercial (and domestic) buildings must exercise all precautions to protect people from injury and damage caused by electrical fires or shocks. An EICR is required to ensure that all systems have been checked and tested by a qualified electrician.

The commercial EICR proves that you have complied with these standards, These electrical safety regulations I know apply to a whole range of commercial properties (some of these need to be tested more often) all commercial electrical systems have to be checked and tested by a qualified electrician at least once every five years.

I am pretty sure all insurance companies will require a EICR as others have mentioned and any landlord I have had dealings with will have had this written into the tenant’s lease for them to undertake as and when required.

 

[Michael Loveridge]

Then we have the Landlords and Tenants Act 1985 – Landlords of commercial (and domestic) buildings must exercise all precautions to protect people from injury and damage caused by electrical fires or shocks.

There is no such thing as the Landlords and Tenants Act 1985. I've seen this mentioned before, and it can only be the result of cutting and pasting from a website whose content is written by someone who doesn't know what they're talking about.

I assume it's a cack-handed reference to the Landlord and Tenant Act 1985. However, that only relates to residential property, not commercial property.

Spreading misinformation like this is potentially causing unjustified concern and even expense to people who believe it.

 

[The Byre]

Spreading misinformation like this is potentially causing unjustified concern and even expense to people who believe it.

And we established the bogusness of the assertion already with post number 19 from @rach88 - when I made the same silly mistake!

 

[Chris Ashdown]

A certain F1 team has just found out the value of a poorly written contract after supporting a driver for many years, to now find he goes to a new team next year. and they both apparently had watertight contracts drawn up by their own solicitors
Detail, Detail, Detail