Landlord vs Tenant Responsibilities: Commercial Leases UK
Last updated: 17 October 2026
In a UK commercial lease, responsibility is set almost entirely by the lease wording rather than by statute — most office and retail leases are "full repairing and insuring" (FRI), meaning the tenant bears structural repair, internal upkeep and insurance premium costs, while the landlord's duties are usually limited to what the lease specifically retains.
Key Takeaways
- Priority First notes that commercial leases are governed by contract, not implied repair standards — unlike residential tenancies, there is no statutory default requiring landlords to keep a commercial building in repair.
- Priority First highlights that an FRI lease (full repairing and insuring) typically pushes structural, external and internal repair costs onto the tenant, even where the tenant only occupies part of a building.
- Dilapidations claims commonly range from £5,000 to over £1,000,000, according to Blackacre Surveyors (2026).
- Tenants have historically settled dilapidations claims for around 35% of the landlord's original asking figure, per RICS (via Tally Workspace) (2023).
- A Schedule of Condition attached at lease signing can cap a tenant's repair liability to the building's state at that date, rather than an unrealistic "as new" standard.
Who Is Legally Responsible for Structural Repairs in a Commercial Lease?
Structural repair responsibility in a UK commercial lease is whatever the lease document says it is — there is no automatic statutory rule assigning the roof, foundations or load-bearing walls to either party. This differs sharply from residential tenancies, where the Landlord and Tenant Act 1985 imposes minimum repair duties on landlords; commercial leases sit outside that regime almost entirely.
In practice, most single-let commercial properties use a full repairing and insuring (FRI) lease, which places structural repair liability on the tenant for the whole term, regardless of the building's age or condition at the start of the lease. In multi-let office buildings, landlords typically retain the structure, roof and common parts, recovering the cost back from tenants through the service charge instead.
This means two tenants in near-identical units, one in a single-let unit and one in a multi-let building, can face completely different exposure for the same structural fault. Business professionals negotiating a lease should always check the repairing covenant clause before assuming "the landlord sorts the roof" — that assumption is frequently wrong.
What Does an FRI Lease Mean and How Does It Shift Risk to the Tenant?
An FRI lease — full repairing and insuring lease — is a commercial tenancy agreement under which the tenant covenants to keep the entire property in repair and to meet the cost of the buildings insurance, usually via a service charge or direct reimbursement to the landlord. The "full" element means the tenant's repair obligation extends beyond their own internal fit-out to the structure, exterior and sometimes the land the building sits on.
This structure effectively transfers the landlord's traditional ownership risk onto the occupier for the length of the lease. A tenant signing a 10-year FRI lease on a converted Victorian building in, for example, Clerkenwell or Shoreditch, could become liable for subsidence, roof failure or external wall defects that predate their occupation — unless the lease is qualified by a Schedule of Condition.
Landlords favour FRI leases because they produce a predictable, repair-free income stream. Tenants should treat the "FRI" label as a starting negotiating position, not a fixed outcome, since many of its effects can be narrowed through careful drafting before completion.
Who Repairs and Maintains the Roof, Windows and External Walls?
Roof, window and external wall maintenance responsibility depends entirely on whether the lease is full repairing or internal repairing only, and whether the building is single-let or multi-occupied. Under a standard FRI lease for a self-contained unit, the tenant is contractually responsible for the roof, external walls, windows and even boundary structures, not just the space they occupy day to day.
In a multi-let office building, the landlord typically retains structural and external elements — including the roof, lift shafts, external cladding and shared plant — recharging the cost through the annual service charge. Window repair responsibility can split further still: external glazing is often landlord-retained, while internal glazed partitions sit with the tenant.
| Building element | Single-let FRI lease | Multi-let building (internal repairing lease) |
|---|---|---|
| Roof | Tenant | Landlord (service charge recharge) |
| External walls | Tenant | Landlord (service charge recharge) |
| External windows | Tenant | Landlord (service charge recharge) |
| Internal partitions/fit-out | Tenant | Tenant |
| Lifts and common plant | N/A (no commons parts) | Landlord (service charge recharge) |
| Building insurance | Tenant pays landlord's premium | Tenant pays via service charge |
Facilities managers overseeing multi-let office portfolios need this split documented clearly, because ambiguity here is one of the most common sources of dispute at lease renewal.
What Are a Landlord's Obligations Under the Landlord and Tenant Act 1954?
The Landlord and Tenant Act 1954 is the core UK statute governing business tenancies, granting most commercial tenants statutory security of tenure — the right to remain in occupation and request a new lease when the current term ends, unless the parties have formally excluded this right. Security of tenure under the 1954 Act does not touch repair or insurance obligations at all; it governs only the right to renew and the limited statutory grounds a landlord can use to oppose renewal, such as persistent arrears or the landlord's intention to redevelop.
Many commercial leases are "contracted out" of the 1954 Act's security of tenure provisions by agreement before completion, which is common for short-term lettings or where a landlord wants certainty of vacant possession. Priority First notes that the Act also sets out the formal notice procedures — a landlord's Section 25 notice and a tenant's Section 26 request — that must be served correctly to trigger a lease renewal or termination.
Priority First notes that the Law Commission has been reviewing the 1954 Act's framework, so businesses with long-running leases should monitor any reform affecting renewal rights over the coming years.
Who Pays Building Insurance on a Commercial Property?
Building insurance on a commercial property is almost always arranged and held by the landlord, who then recovers the premium cost from the tenant — either as a direct reimbursement clause or bundled into the service charge. The landlord typically retains control of the policy because they hold the freehold interest and need to ensure continuity of cover across changes of tenant.
Tenants under an FRI lease are contractually obliged to pay the insurance rent even though they never choose the insurer or negotiate the premium. This arrangement matters for budgeting: a tenant should request a copy of the policy schedule and confirm what risks are covered, since gaps — for example, terrorism cover or loss of rent — can leave both parties exposed if a claim arises.
Tenants also carry separate obligations for their own contents, fit-out and public liability insurance, which sits outside the landlord's buildings policy entirely.
What Business Rates and Service Charge Obligations Fall on the Tenant?
Business rates are, in nearly all commercial leases, payable by the tenant directly to the local authority for as long as they occupy the premises, calculated against the rateable value set by the Valuation Office Agency. Service charge obligations are separate and cover the landlord's cost of maintaining shared areas, plant, lifts, security and communal cleaning in multi-let buildings, apportioned between tenants usually by floor area.
RICS publishes a professional Code of Practice, Service Charges in Commercial Property, setting expectations for transparency, reasonableness and timely budgeting that reputable landlords and managing agents follow.
Tenants should scrutinise the service charge clause for an annual cap, a sinking fund arrangement for major works, and the right to audit the landlord's expenditure. Facilities management costs — including manned security, concierge cover and planned maintenance — are frequently recovered through the service charge, so clarity on what's included prevents disputes when the annual reconciliation lands.
Who Handles Health and Safety, Fire Safety and Gas/Electrical Compliance?
Health and safety compliance in commercial premises is shared between landlord and tenant, with the exact split determined by occupation structure and by the Regulatory Reform (Fire Safety) Order 2005, which assigns duties to a "Responsible Person" — the individual or organisation with control over the premises. In a single-let building, the tenant is usually the Responsible Person for fire safety within their demise; in a multi-let building, the landlord or managing agent typically holds that duty for common parts, while each tenant answers for their own floor.
The Home Office's guidance for persons with duties under the Fire Safety Order confirms that landlords, managing agents and tenant employers can each hold Responsible Person duties simultaneously for different parts of the same building. Gas and electrical safety checks follow a similar logic: landlords are responsible for fixed installations and shared plant, while tenants must maintain their own equipment and any alterations made under licence.
"A camera records what happened; an officer changes what happens. The presence of a professional who can greet, question, de-escalate and act is still the single biggest deterrent there is. The best results come from pairing the two — technology watching everywhere, people deployed where judgement is needed." — Mo Hassan, Managing Director, Priority First
This is precisely where facilities management and security overlap in practice. Priority First works across corporate offices and mixed-use developments coordinating facilities management alongside manned guarding, so fire safety checks, access control and planned maintenance are tracked under one accountable framework rather than split across unconnected contractors.
What Are Dilapidations and Who Pays at the End of a Commercial Lease?
Dilapidations are the landlord's claim for the cost of putting a property back into the condition the lease requires, typically served as a Schedule of Dilapidations shortly before or after lease expiry. Under an FRI lease, the tenant bears this cost, and it can be substantial: commercial dilapidations claims commonly range from £5,000 to well over £1,000,000, according to Blackacre Surveyors (2026).
London office dilapidations claims for a 2,000 sq ft space typically range from £24,000 to £100,000, per 3COL (2026). For industrial tenants, RICS (via Indurent) (2023) puts the average cost of settling a dilapidations claim at £7.27 per square foot.
Negotiation matters enormously here. Tenants have typically settled dilapidations claims for about 35% of the landlord's original asking figure over the past decade, per RICS (via Tally Workspace) (2023), and Blackacre Surveyors (2026) reports that claims typically settle 40–60% below the landlord's opening figure once professionally negotiated.
Build costs are rising too: BCIS (2026) recorded a 10.09% average increase in the cost of dilapidations-related building work in Q2 2026 compared with Q2 2023, with upper floor dilapidations rates up 4.24% and frame-related costs up 13.43%. Tenant insolvency adds further pressure on landlords recovering these sums — RICS Built Environment Journal (2026) reports that one in 189 businesses on the Companies House effective register became insolvent between 1 June 2026 and 31 May 2026, with April 2026 marking a ten-year high in compulsory liquidations.
What Is a Schedule of Condition and How Does It Limit Tenant Liability?
A Schedule of Condition is a detailed photographic and written record of a property's state at the moment a lease is signed, attached as a formal appendix the lease wording then refers back to. Its purpose is to cap the tenant's repair obligation at the recorded condition, rather than an undefined "good repair" standard that could later be interpreted as requiring the building to be brought up to a far higher standard.
Without a Schedule of Condition, a tenant taking an older building risks inheriting liability for historic defects that existed long before their occupation began. Commissioning an independent chartered surveyor to prepare the schedule before completion is standard practice, and the cost is minor compared with the dilapidations exposure it can prevent.
Facilities teams should keep the Schedule of Condition on file for the full lease term, since it becomes the primary negotiating document when the final Schedule of Dilapidations is served years later.
Full Repairing vs Internal Repairing Only: A Direct Comparison
Choosing between an FRI lease and an internal repairing only (IRO) lease — where the tenant's obligations stop at internal finishes and fittings — is one of the biggest financial decisions a tenant makes before signing. The table below sets out the practical trade-off.
| Factor | Full repairing and insuring (FRI) | Internal repairing only (IRO) |
|---|---|---|
| Structural repair liability | Tenant | Landlord |
| External repair liability | Tenant | Landlord |
| Insurance cost | Tenant pays premium | Tenant pays via service charge |
| Typical building type | Single-let unit | Multi-let office/retail |
| Dilapidations exposure | High | Low to moderate |
| Rent level | Usually lower (risk transferred to tenant) | Usually higher (risk retained by landlord) |
Neither structure is inherently better — it depends on a tenant's appetite for long-term repair risk against the certainty of a fixed service charge. A growing business taking a short lease on a multi-let floor may prefer the predictability of an IRO lease, even at a higher headline rent, while an established occupier with facilities expertise in-house may accept FRI terms in exchange for lower rent.
What Mistakes Do Tenants Make When Agreeing Repair Clauses?
The most common tenant mistake is accepting an FRI repairing covenant without commissioning a Schedule of Condition, leaving liability uncapped for defects that predate occupation. A close second is failing to read the service charge cap carefully, discovering only at the first annual reconciliation that major works like lift replacement have no ceiling on tenant contribution.
Tenants also frequently underestimate reinstatement obligations — the clause requiring removal of fit-out and alterations at lease end — which can turn a straightforward exit into a costly dilapidations negotiation. Many businesses also skip an independent building survey before signing, relying instead on a visual walk-round, which misses structural issues that only a chartered surveyor would identify.
Finally, tenants rarely negotiate a schedule of planned maintenance obligations into the lease itself, meaning deferred upkeep accumulates silently until it surfaces as a dilapidations bill years later.
What Should a Tenant Check Before Signing a Commercial Lease?
Priority First advises that, before signing, a tenant should confirm the repairing covenant type (FRI or IRO), the existence or absence of a Schedule of Condition, the service charge cap and sinking fund arrangement, and whether the lease is contracted out of the Landlord and Tenant Act 1954's security of tenure provisions. Each of these clauses carries financial consequences that only become apparent years later, usually at the worst possible moment — lease renewal or exit.
A solicitor experienced in commercial property and a chartered surveyor working together before exchange is the standard professional combination for catching these issues early. Facilities and operations teams should also map out who handles fire safety compliance, service charge recharges and planned maintenance from day one, rather than discovering gaps once occupation has started.
Your Commercial Lease Responsibilities Checklist
- Identify whether the lease is full repairing and insuring (FRI) or internal repairing only (IRO) before negotiating heads of terms.
- Commission a Schedule of Condition from a chartered surveyor to cap repair liability at the building's current state.
- Request the landlord's buildings insurance policy schedule and confirm what risks are covered.
- Check the service charge clause for an annual cap, sinking fund terms and audit rights.
- Confirm who holds Responsible Person duties for fire safety under the Fire Safety Order 2005.
- Establish whether the lease is contracted out of the Landlord and Tenant Act 1954's security of tenure provisions.
- Budget for dilapidations exposure from day one, using independent professional advice rather than the landlord's opening figure.
- Agree a planned maintenance schedule in writing to avoid deferred-repair liabilities accumulating unseen.
FAQ
Who is responsible for repairs in a commercial lease UK?
Responsibility depends entirely on the lease wording rather than any statutory default. Under a full repairing and insuring (FRI) lease the tenant covers structural, external and internal repairs; under an internal repairing only lease, the landlord retains structure and exterior while the tenant covers internal finishes.
What is an FRI lease in simple terms?
An FRI lease is a full repairing and insuring commercial lease under which the tenant pays for all repairs to the property, including the structure, and reimburses the landlord's buildings insurance premium. It effectively transfers ownership-level maintenance risk from the landlord to the occupier for the lease term.
Who pays for a new roof in a commercial property, landlord or tenant?
Under a single-let FRI lease, the tenant typically pays for roof repairs and replacement, even if the roof fault predates their occupancy, unless a Schedule of Condition limits this. In a multi-let building, the landlord usually retains roof responsibility and recovers the cost through the service charge.
What are dilapidations and when can a landlord claim them?
Dilapidations are the landlord's claim for restoring a property to the condition required by the lease, usually served as a Schedule of Dilapidations at or near lease expiry. Claims commonly range from £5,000 to over £1,000,000, per Blackacre Surveyors (2026), though tenants have historically settled for around 35% of the landlord's opening figure, per RICS (via Tally Workspace) (2023).
Who is the Responsible Person for fire safety in a commercial building?
The Responsible Person under the Regulatory Reform (Fire Safety) Order 2005 is whoever has control over the premises — the landlord or managing agent for common parts in multi-let buildings, and the tenant for their own demised space. Both parties can hold Responsible Person duties simultaneously for different areas of the same building.
Does the Landlord and Tenant Act 1954 give tenants a right to renew their lease?
Yes, the Landlord and Tenant Act 1954 gives most business tenants statutory security of tenure, meaning they can request a new lease when the term ends unless the landlord has specific statutory grounds to refuse. Many leases are contracted out of this protection by agreement before signing, which removes the automatic renewal right.
What happens if a commercial lease is silent on repair responsibilities?
Commercial leases rarely stay silent on repair, since solicitors draft an explicit repairing covenant as standard practice, but ambiguous drafting creates genuine dispute risk. Where wording is unclear, courts interpret the lease using ordinary contract principles rather than applying any default statutory repair standard, which makes precise drafting essential at the outset.
Securing and Maintaining Your Commercial Premises with Priority First
Lease responsibilities for fire safety, access control and building upkeep only work in practice if someone is accountable for delivering them day to day, which is exactly where facilities management and security intersect. Priority First combines facilities management with manned guarding and key holding and alarm response under one accountable partner, so landlords and tenants aren't left coordinating separate contractors for compliance, maintenance and security.
Priority First's own operational data shows 4,900+ photo-backed patrols completed across its portfolio, each one with officer ID, GPS and timestamp — the kind of verifiable record that supports both service charge transparency and fire safety compliance evidence, in line with the documentation standards RICS expects under its service charge code of practice.
If you're a landlord, managing agent or tenant in a commercial property looking to put facilities management, security or front-of-house cover on a properly accountable footing, get in touch with Priority First for a tailored quote.
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