Commercial Property Defects UK: Landlord & Tenant Guide

Overview

A property defect, in the commercial context, is any flaw in the building or its services that affects its physical condition, safety, or fitness for its intended use. Defects generally fall into a few broad buckets: structural issues (subsidence, movement, failing foundations), envelope problems (roof failure, damp penetration, defective cladding), mechanical and electrical faults (failing HVAC, dodgy wiring, broken lifts), and latent or inherent defects that stem from the original design, materials, or workmanship.

Some show up within weeks of occupation. Others lurk for years before surfacing, often at the worst possible moment. In English law, there is no single statute that deals with commercial property defects as a whole. Instead, responsibility is worked out through a mix of the lease terms, common law principles, and specific legislation including the Defective Premises Act 1972, the Landlord and Tenant Act 1985 (which applies mainly to residential but has relevant overlaps), the Building Safety Act 2022, and health and safety regulations. The lease itself usually does the heavy lifting, which is why the wording matters so much.

Key steps

1. Identify the defect properly. Before anyone starts quoting legislation, get clarity on what is actually wrong. A building surveyor or specialist engineer should inspect and produce a written report describing the defect, its likely cause, and the probable remedial work. Guessing at causation is how parties end up arguing about the wrong thing for months.
2. Read the lease, line by line. The repairing covenants in the lease decide most commercial defect disputes. Look at who is responsible for the structure, the exterior, the services, and the interior. Check whether there is a schedule of condition attached, whether the lease is full repairing and insuring (FRI), and whether any defects predate the tenancy. The answers shape everything else.
3. Notify the other party in writing. Whether you are a landlord receiving a repair request or a tenant raising a concern, put it in writing and keep a dated record. Include photographs, the surveyor's findings if you have one, and a clear reference to the lease clause you say applies. Verbal complaints rarely survive contact with a later dispute.
4. Try to agree a way forward. Most defect issues can be resolved commercially if both sides engage early. That might mean the landlord carrying out works and recovering costs through the service charge, the tenant doing the work under a licence, or a negotiated settlement where responsibility is shared. Mediation can help where positions have hardened but neither side wants court.
5. Consider formal remedies only if needed. If negotiation fails, options include specific performance, damages for breach of covenant, self-help (where the lease permits), or, in limited cases, forfeiture. Each has traps. Forfeiture in particular can be lost by accepting rent, and self-help often requires a Jervis v Harris style clause. Take guidance before pulling any of these levers.

Common questions