REALWorld Law

Commercial leases

Repairing the leased space

Who pays for the maintenance and repair of the real estate actually occupied by the lessee?

Angola

Angola

Except if otherwise agreed, the lessor is responsible for the repair of the property. However, the parties may agree that the lessee is responsible for these expenses.

It is usual for the lessor to bear the additional expenses of an extraordinary nature (including for the fixed asset structures) and for the lessee to bear the ordinary repair costs (with the maintenance) of the property.

If the lessor is in arrears, the lessee may carry out works of an urgent nature, and be reimbursed by the lessor later on.

Australia

Australia

In general, the tenant will not be responsible for structural repairs, inherent defects and fair wear and tear of the real estate they lease. The landlord may or may not be liable for these repairs depending upon the terms of the lease. Tenants tend to be liable for any repairs in relation to damage caused by the tenant and to be under an obligation to repair and maintain the leased premises.

Belgium

Belgium

The landlord is obliged by law to deliver the leased property to the tenant, to maintain the property in an appropriate condition for its intended purpose, unless this is agreed otherwise, and to allow the tenant the peaceful enjoyment of the premises for the duration of the lease.

The landlord is also required to maintain the premises in a good state of repair in all respects, except for maintenance that explicitly remains the tenant's responsibility by law. The tenant is only liable for 'small maintenance repairs' but these are not defined. As a result, a considerable body of case law has arisen concerning what constitutes 'small maintenance repairs'. Major repairs and the repair of damage caused by an Act of God remain the responsibility of the landlord.

Parties are, however, free to agree that all repairs should be the responsibility of either the tenant or the landlord, or to stipulate in detail which repairs are the responsibility of each party.

If the landlord is forced to perform urgent repairs during the lease, the tenant must allow this work to be done and cannot claim damages for them, or seek a rent reduction, unless the work takes longer than 40 days. The parties may, however, agree on different provisions in the lease contract.

Bosnia-Herzegovina

Bosnia-Herzegovina

The landlord is responsible for the repair and maintenance of common areas and the structure of the building. Tenants are responsible for maintaining the interiors of their individual units.

Canada

Canada

Generally, the tenant is responsible for maintaining the interior lease space while the landlord is typically responsible for maintaining the exterior, structure and common areas of the property, subject to reimbursement by tenants through the shared operating expense mechanism whereby all of the tenants proportionately share the cost of maintaining and operating the common facilities. Responsibility for the costs of major capital replacements, particularly for items such as heating and cooling systems, or roof structures and membranes, are negotiated terms in the lease.

In general, the tenant will not be responsible for carrying out structural repairs, repairs to correct inherent defects or repairs for reasonable wear and tear of the real estate they lease. The landlord may or may not be liable for the cost of these repairs depending upon the terms of the lease. Tenants tend to be liable for any repairs in relation to damage caused by the tenant and to be under an obligation to repair and maintain the leased premises.

China

China

Unless otherwise agreed, the lessor is responsible for the maintenance and repair of the premises. If the lessor fails to fulfil his obligations, the lessee may maintain or repair the premises on his own but at the lessor's expense.

If the lessee's use of the premises is impaired due to failure to maintain or repair, the lessee is entitled to withold rent or extend the lease term accordingly.

Croatia

Croatia

Each tenant is responsible for maintaining and repairing the interior of their individual unit, excluding structural aspects.

Czech Republic

Czech Republic

The lessee is obliged to inform the lessor immediately when any repairs that are the responsibility of the lessor are necessary. A lessee who fails to do so is responsible for any damage resulting. If the lessee has reported a defect, but the lessor fails to repair it and such inaction causes damage to the lessee, the lessee has the right to claim a discounted rent. Where the lessee has spent money on repairs which were the lessor's responsibility, the lessee has the right to be reimbursed these costs if the repair was performed with consent of the lessor or if the lessor failed to carry out the repairs without undue delay after having been informed about the necessity of the repairs. In other circumstances, the lessee may only claim the increase in the value of the lessor's asset.

Denmark

Denmark

Under the Commercial Rent Act, the lessor is obliged to repair and maintain the property. This obligation is usually transferred to the lessee under the contract.

Interior maintenance is usually carried out by the lessee. Exterior maintenance is usually carried out by the lessor.

France

France

Under the French Civil Code, expenses relating to the maintenance of the premises and major repairs are payable by the landlord.

It is market practice for the landlord to recover all, or a major part, of these expenses from the tenant in the form of service charges. Major/structural works listed under article 606 of the Civil Code, together with the fees incurred in relation to such works, may not be recharged to the tenant.

An extensive and precise list of works completed during the last three years (with their cost) and to be completed during the coming three years (with a budget) must be drawn up and communicated to the tenant by the landlord on signing the lease. An updated list of works completed during the last three years (with their cost) and to be completed during the coming three years (with a budget) is to be provided every three years by the landlord to the tenant.

Germany

Germany

According to statutory law, the landlord is responsible for the maintenance and repair of the leased property. However, most leases contain an apportionment of responsibility by which the landlord will be responsible for the structure, external appearance and common areas (Dach und Fach) and the tenant will be responsible for maintaining the interior. Recent case law indicates that many German lease agreements contain potentially invalid provisions regarding decorative repairs. Such provisions are usually considered to be general terms and conditions and German case law imposes strict rules on the validity of these. In particular, a provision obliging the tenant to carry out decorative repairs at contractually fixed intervals irrespective of the actual state of the premises is invalid since it places the tenant at an unreasonable disadvantage.

Hong Kong, SAR

Hong Kong, SAR

Lessees are responsible for the maintenance and repair of the interior of the premises they occupy.

Hungary

Hungary

Unless the parties agree otherwise, the tenant, at its own expense, is responsible for the day-to-day maintenance and upkeep of the leased premises, while the landlord is responsible for structural repairs and maintenance.

Ireland

Ireland

The tenant usually pays.

Italy

Italy

The Italian Civil Code distinguishes between ordinary and extraordinary maintenance. Generally the tenant is responsible for minor repairs and ordinary maintenance while the landlord is responsible for extraordinary maintenance, unless otherwise set out in the contract (the landlord must remain responsible for extraordinary repairs in the case of residential leases).

Japan

Japan

The lessor is responsible for the maintenance and repair of the building structure.  Regarding maintenance and repair of ordinary wear and tear of the premises, the terms of the lease agreement will dictate responsibility.  In many commercial leases, the lessees are responsible for such maintenance and repair.

Netherlands

Netherlands

Dutch law obliges the lessee to undertake minor maintenance and day-to-day repairs. The lessor is obliged to carry out any necessary major maintenance or enhancement and major repairs. The parties may agree contractually on a different arrangement.

Nigeria

Nigeria

The standard practice is that the lessor is responsible for all external and structural repairs required for the property and all internal maintenance and repair within the premises exclusively occupied by the lessee is the responsibility of the lessee to bear.

However, the parties can deviate from the usual practice by negotiating and agreeing on the apportionment of responsibility for the maintenance and repairs of the property. Where a lessee takes a long-term lease of the whole property, it can by contract assume the responsibility for all maintenance works of the property for the period it occupies same.

Norway

Norway

A tenant is normally responsible for the cost of maintaining the rented property to an acceptable standard, including both external and internal maintenance of entrance doors, gates and windows with framing. The tenant's duty of maintenance also usually includes renewing wallpaper and floor coverings, and interior decorating and repair, as well as wiring/pipes and other arrangements relating to water, heating, electricity, ventilation and refrigeration systems.

The tenant is also often responsible for any damage following breaking and entering or vandalism to the rental property, including damage to windows, frames, and entry doors and gates.

Poland

Poland

The landlord must maintain the leased property so that it is fit for its purpose throughout the period of the lease. This obligation cannot be contracted out of in the agreement. The landlord is liable for defects in the leased property which, wholly or partially, prevent it from being used for its intended purpose according to the lease. In such cases, the tenant may request a rent reduction or, if the defects are irreparable or the landlord refuses to repair the property, may even withdraw from the agreement. The tenant is responsible for minor repairs. This term is not defined by Polish law and the definition depends on the specific circumstances. Each party pays for the repairs for which it is responsible. The parties may, however, agree for a larger proportion of the costs to be passed on to the tenant.

Portugal

Portugal

The landlord is responsible for the repair of the property. However, the parties may establish in the contract that the tenant shall be responsible for these expenses.

In practice, it is usual for the landlord to bear the additional expenses of an extraordinary nature (including for the fixed asset structures), and for the tenant to bear the ordinary repair costs (with the maintenance) of the property.

If the landlord is in arrears, the tenant may carry out works of an urgent nature, being reimbursed by the landlord later on. 

Romania

Romania

The landlord has a general obligation to carry out any major and necessary repairs to the premises which are the subject of the lease agreement. Therefore, unless the lease provides to the contrary, the expenses related to major remedial works are to be paid by the landlord, while those generated by the day-to-day maintenance of the property are to be paid by the tenant (eg the removal of snow). It is also common for the parties to agree that the landlord will initially bear the cost of day-to-day expenses but then recharge them to the tenant.

Slovak Republic

Slovak Republic

The landlord is obliged to maintain the property (whether residential or commercial) in good condition to enable its normal or agreed use, although in the case of commercial premises it is open to the parties to agree otherwise. A tenant of commercial premises is obliged to cover the costs of normal maintenance. The tenant is also obliged to notify the landlord without unreasonable delay when the need for any repairs arises, otherwise the tenant may be liable for any resulting damage. The tenant is responsible for the costs of minor repairs and any other are the responsibility of the landlord, unless stated otherwise in the contract.

Spain

Spain

Under the Urban Leases Act, the landlord is responsible for the maintenance and repair of leased property; however, the parties to a commercial lease are free to allocate this responsibility to the tenant.

Small repairs due to ordinary wear and tear will be borne by the tenant.

Sweden

Sweden

Under most leases the landlord has an obligation to repair and maintain the exterior, the structure of the building and the common areas, while the tenant is responsible for the interior of the premises.

Thailand

Thailand

Under the Civil and Commercial Code, it is the lessee’s duty to undertake ordinary maintenances and petty repairs. This matter is, however, agreeable upon by contractual arrangement between the parties.

United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

Within Abu Dhabi and outside the Abu Dhabi Global Market free zone

The lessee is to carry out minor or agreed repairs. Lessors are required to keep the property fit for use and carry out repairs (excluding those that fall to the lessee) unless otherwise agreed.

If the lessor delays in carrying out repairs or cannot be contacted when the lessee attempts to notify it of the necessary repairs, the lessee can apply to the Rental Disputes Resolution Committee (RDRC) in Abu Dhabi to obtain permission to:

  • Carry out such repairs and deduct the expenses incurred from the rent
  • Exercise the right to rescind the tenancy contract, or
  • Reduce the rent to the extent that the lessee cannot use the property.

The lessee should not prevent the lessor from carrying out any urgent repairs necessary to conserve the property.

Should the necessary repairs result in the lessee being unable to utilize either the whole or part of the property, the lessee can apply to the RDRC to obtain permission to:

  • Rescind the lease
  • Require a reimbursement of the whole or part of the rent for the duration that the lessee cannot occupy the whole or part of the property
  • Extend the term to the extent of the period during which occupation by the lessee was not possible

The lessee’s rights cease to have effect should the lessee continue to occupy the property for more than a month after the date of the loss of utility and fail to apply to the RDRC to exercise the remedies available to them, such rights are deemed to have been forfeited (unless a reasonable excuse is given).

Within the Abu Dhabi Global Market free zone

In the Abu Dhabi Global Market free zone, there are no regulations governing repair obligations, which means the parties are free to contract as they wish. It is therefore important that such matters are adequately dealt with in the lease.

United Arab Emirates - Dubai

United Arab Emirates - Dubai

If the lease itself is silent on the issue of maintenance and repair of the property the subject of the lease, the law provides that the landlord is responsible for the maintenance and repair of any defect or malfunction which affects the use of the property. This would leave a tenant responsible for minor repairs and maintenance obligations only.

However, the law allows this position to be changed by agreement and, most commonly, such agreement will be contained in the lease. In practice, it is common for a tenant to be responsible for the maintenance and repair of the property leased to it, and for the landlord to be responsible for the maintenance and repair of the remainder of the development/building etc.

UK - England and Wales UK - England and Wales

UK - England and Wales

In a multi-let development with many tenants, the landlord repairs and maintains common areas and the structure of the building and recovers the cost from the tenants via a service charge. Tenants are responsible for the interior of the premises they occupy.

UK - Scotland

UK - Scotland

According to Scottish common law the landlord is obliged to keep the premises wind- and watertight. However, the lease will normally include a specific statement that the tenant has accepted that the premises (and the common areas) are in a good condition and state of repair and fit for their purposes.

The tenant is then responsible for the repair, maintenance and decoration of the premises, as well as any necessary rebuilding and restoration except where this is covered by insurance.

In this case the landlord is normally responsible for using the proceeds of an insurance claim to make good any damage.

Ukraine

Ukraine

Ukrainian law differentiates between capital repairs and current repairs of the real estate. Usually, capital repairs are carried out by the lessor, and current repairs are carried out by the lessee. Parties to the lease agreement can agree on other provisions relating to maintenance and repair.

United States

United States

In the typical commercial lease, a tenant will be directly responsible for maintaining and repairing certain portions of the interior of the leased premises at its own cost and the landlord will be responsible for repairing and maintaining the exterior, structure and common areas of the property, subject to reimbursement, typically with some limitations (such as for certain capital expenses), by tenants through the shared operating expense mechanism whereby all of the tenants proportionately share the cost of maintaining and operating the common facilities. Some leases (called “full-service gross” leases) require tenants only to pay increases above those operating expenses that the landlord incurred in a set ‘Base Year’ (which will often either be the calendar year during which the lease is signed, or the ensuing calendar year if the lease is signed closer to such ensuing calendar year). With ‘ground leases’ and certain types of ‘net leases’, the tenant will be directly responsible for repairing and maintaining the entire leased premises at its own expense (which, for some leases, may include the legal parcel that is the subject of the leased space). In ‘net leases’, in principle, the tenant is responsible for the cost of operating, insuring and paying taxes on its proportionate share of the real property. A ‘ground lease’ is a sub-specie of net lease where the tenant is given rights to develop a parcel of land leased to it.

Zimbabwe

Zimbabwe

Typically, the landlord repairs and maintains common areas and the structure of the building. The lessee is responsible for the maintenance of the interior of the premises they occupy.