Leaky Roof?

Help! The roof is leaking at my commercial property…

This article is the first in a series entitled: Navigating Commercial Leasing in New Zealand, by Hope Horrocks (Senior Solicitor).

A leaky roof is a big problem that can impact the functionality, safety, and overall value of a commercial property. This article offers insights into how landlords and tenants can address and mitigate leaky roof concerns to ensure a successful leasing experience.

You may be leasing a commercial property for a variety of business purposes, such as offices, retail spaces, warehouses, and industrial facilities. The terms of a commercial lease are negotiated between the landlord and tenant, should not only cover rent, lease duration, but the maintenance responsibilities and repair obligations specific to these commercial spaces.

Leaky Roofs: Headaches for both Landlord and Tenants

Leaky roofs are a significant issue that can affect the condition of a commercial property, leading to structural damage, mold growth, compromised insulation, loss of stock and potential disruptions to business operations. In New Zealand, the problem of leaky buildings gained prominence in the early 2000s, leading to regulatory changes and heightened awareness about building standards and maintenance. Climate change has recently brought us unpredictable wet weather resulting in damage across the nation and re-raised concerns about the weather-tightness of many commercial properties.

Before you enter into the lease, you should consider:

1.       Due Diligence: Tenants should conduct thorough due diligence on the property. This includes inspecting the roof's condition, drainage systems, and gutters. Engaging a qualified building inspector can provide an unbiased assessment of the property's structural integrity.

2.       Lease Agreement: The lease agreement should explicitly outline maintenance and repair responsibilities related to the roof. Landlords and tenants should clearly define who is responsible for addressing leaks, repairs, and maintenance. Notification for urgent repairs and time frames for addressing weathertightness issues should all be considered. In some cases, repairs may not be able to be made in a timely manner due ongoing weather conditions, safety consideration or supply issues, this should be factored in the reasonability of when repairs and maintenance need to take place. A process for handling delays in relation to rent abatements and safety consideration may be beneficial.   Having these processes and obligations documented can help prevent disputes and ensure timely resolutions.

3.       Building Warrant of Fitness (BWOF): Landlords of certain commercial properties are required to obtain a BWOF, which certifies that specified systems in the building, including the roof's weathertightness, are regularly inspected and maintained to meet building code requirements. A tenant should obtain a copy of the buildings current warrant of fitness as part of their due diligence.

4.       Budget: Both parties should consider the costs of meeting their obligations to maintain the premises and factor those costs into their respective budgets.

5.       Professional Advice: Both parties should seek legal advice before finalizing a lease agreement. Legal professionals experienced in commercial real estate can help draft clear and comprehensive lease terms that address leaky roof concerns and potential disputes.

During the Tenancy

1.       Reporting Obligations: Tenants should promptly report any signs of roof leakage to the landlord, allowing for swift action to address the issue. Landlords should respond promptly and engage qualified professionals to assess and rectify the problem.

2.       Maintenance Routine: Landlord and tenants should establish a regular maintenance routine that includes roof inspections, gutter cleaning, and addressing any potential issues before they escalate. Regular maintenance can help prevent leaky roofs and maintain the property's integrity.

3.       Regulations: Landlord should stay informed about building standards and regulations to ensure they are properly maintaining their property.

4.       Handling a dispute: If a dispute arises about the weathertightness of a property during a tenancy the parties need to:

a.      Provide proper notice under the lease of the dispute

b.      Seek the appropriate legal and expert advice

c.      Check the terms of the lease to ensure you understand the parties’ respective obligations under the particular circumstances that have occurred

d.      Try in good faith to negotiate between the parties

e.      Use the dispute resolution process under the lease if negotiations do not resolve the dispute.

Proper due diligence, clear lease agreements, and proactive maintenance are crucial to mitigating the risks associated with leaky roofs. By collaborating and communicating effectively you can secure a well-maintained property and a successful leasing experience. Engaging trusted professionals like Turner Hopkins can help you navigate the pitfalls and problems of entering into a new lease and meeting your obligations during a tenancy.  If you are having issues with a leaky roof or other maintenance problems contact our commercial team today.

Need legal assistance with your commercial property?

Or call: +64-9-4862169