“Complying With Building Codes In A Commercial Rental” written by Mike Marko.
Do you know the commercial rental building codes?
Almost every building that is built or being built (or modified) must follow a certain set of rules called building codes. They’re an an essential part of construction for any property, including a commercial rental.
Wherever you go, the building codes are compulsory. They should be taken seriously by everyone including the property managers.
Do you know why you need to follow these codes?
Well, in today’s article, we will talk about building codes and why your commercial rental property has to follow it.
Compliance Of Building Codes For A Commercial Rental
As the property manager in the commercial rental specialty you will be asked to manage commercial buildings that have been previously constructed and others that are under construction or have recently concluded construction. When taking on a new commercial building to manage you need to make sure that the building you will be managing is safe and was constructed according to present building and safety codes.
Each commercial building will have certificates of occupancies, and other government certificates showing that the construction was done according to standards and that the building is safe for tenants to occupy the space.
When taking on new or established commercial building you need to know what is required for compliance of building codes and have knowledge about the present safety condition required for the building you will be managing.
Knowing what is required for building code compliance in your area is important. That knowledge can help you manage and keep your commercial rental in good condition.
Before discussing the different types of compliance, we should first have an understanding of what a building code is and how it could affect your commercial rental business…
What is A Building Code
The building code also known as building control or building regulations, is a certain set of rules that specify the standards for constructed objects such as buildings, and nonbuilding structures.
The building code is intended to be applied by architects, engineers, interior designers, constructors, and regulators when constructing new buildings for commercial uses. Building codes are used by safety inspectors, environmental scientists, real estate developers, subcontractors, manufacturers of building products and materials, insurance companies, facility managers, and others to guarantee that correct materials were used in construction and that the building is safe for occupancy.
The main purpose of the building code is to protect public health, safety, and general welfare.
Examples of building codes include:
- International Commercial or Residential Code [ICC/IRC] in the USA
- Electrical codes and plumbing, mechanical codes in the USA
- National model codes published by the National Research Council of Canada
Building codes are meant to be followed for all new construction. They also need to be adopted to older constructed building especially if you have a commercial rental property. You are legally liable for making sure that a building is in compliance for building and safety codes. If you have a building that can’t meet building codes then you should not continue the operation of the property until it can be modified to meet the requirements of the area.
Types Of Building Codes
In the United States and in many other countries government officials are setting standards that require every building being constructed or previously constructed to be built or modified to follow present building codes. Each country has their own building codes but even if they are different from the others the main goal of building codes is to keep the building safe for everyone.
Below are some different types of building codes that should be observed when planning or completing a new construction. Additionally you should make sure that when asked to manage a commercial building that the building was certified by government officials and meets the standards of the local and national building codes…
National Building Codes
National building codes are building codes that are developed by the government agencies or quasi-governmental standard organizations. This type of building code is required by the government and it is compulsory to oversee new construction projects. They are also used to bring older buildings into compliance for safety standards. National building codes are used in different buildings such as residential property and commercial rental throughout the world.
Model Building Codes
This type of building code exists in countries where the power of regulating construction and fire safety are assigned to local authorities. Model building codes has no legal status unless it is adopted by an authority having jurisdiction over the construction and certificates of occupancy for buildings.
Once Model building codes are adopted by the local authority they can be referenced in any legal instruments and the particular model code will become a law.
Aside from the United States, this type of building code is also used in the following countries:
o Abu Dhabi
o the Caribbean Community
o Saudi Arabia
The Eurocode is a type of building code that is used entirely in Europe. The main reason for use of Eurocode during the construction of new and existing buildings is again to ensure public safety when using or visiting any type of building. This Pan-European building code has succeeded the older national building codes and each country over Europe has National Annexes to localize the contents of the Eurocode.
What Is Code Compliance
When you are operating a commercial rental property this property must meet and be in any code compliance required by local and national inspectors.
If the property is recently constructed or about to be completed it is still required to follow and be in compliance of any and all building and safety codes. Commercial building rentals must also comply with the federal Americans With Disabilities Act (ADA) standards so it can be accessed by disabled persons.
Another part of the code compliance is where the building must be free of environmental hazards such as lead paint dust, asbestos, and chemical contaminants.
Scope Of Building Codes
All countries and local and city governments have reviewed and decided what building codes they require and how they set standards for regulating or bringing into compliance different parts of the buildings in their area:
- wall assemblies
- fenestration size/locations
- egress rules
- size/location of rooms
- floor assemblies
- roof structures/assemblies
- energy efficiency
- stairs and halls
- site drainage & storage
- fixtures standards
- occupancy rules
- swimming pool
Most local and national governments will require compliance of rules regarding parking and traffic impact. Each building whether it’s a residential or commercial rental property must have enough parking space for its tenants and clients. Aside from that, the property must be perfectly planned so it won’t affect the flow of the traffic and contribute to the ongoing growth of the community it is being built in.
Building codes, material standards, and fire codes are strict and are used to minimize the risk of a fire and to ensure safe evacuation in the event of such an emergency. Other building code rules and safety standards are set up to overcome or confront emergencies includes earthquakes, floods, and other natural disasters.
Building codes and safety requirements will be set extremely high in disaster prone areas that frequently experience earthquakes (seismic code), hurricane, flood, and tsunami resistance, where a failure would be catastrophic. The design and the materials that will be used in the building must prevent or at least lessen the possible casualties if emergencies happen.
Minimum and maximum room and exit sizes and location are also set in the building code. The qualification of individuals or corporations that will construct and work in the building is also stated.
Negotiating A Good Compliance Clause
As the property manager of the commercial rental property, consider these approaches for negotiating a good compliance clause.
Landlord-Friendly Compliance Clause
Almost all property managers and landlords are providing rental lease agreements with a compliance clause regarding the commercial buildings they manage. However, when agreeing to compliance it is recommended that you know and understand the operations and construction of your commercial buildings so you can easily set tenant and landlord responsibilities.
You can make your tenant responsible for “compliance with all laws” which will require them to provide certificates of occupancy, insurance, and other legal documents prior to occupying the commercial building. You can give them all the responsibilities of keeping the commercial rental property in good condition.
Example of duties that might involve in this clause are:
- Replacing a leaking roof
- Widening the lobby doorways
- Removing building-wide deteriorating asbestos
- Making sure all sprinkler systems, smoke detector appliances, and fire escape equipment are in place and up to code
Even though you are making your tenants responsible for building compliance it is still your legal responsibility as a property manager to ensure that compliance is met and that the building is safe for occupancy…
Tenant-Friendly Compliance Clause
Your tenant can also get benefits or advantages from a compliance clause. To make it possible, it should include the following:
- Requiring the landlord to promise or warrant that the building is in compliance as of the time you take possession. This will limit tenant’s responsibilities for any noncompliance that existed.
- Requiring the landlord to warrant that the space is code-compliant to the tenant’s intended business activities. This will ensure the tenant that he/she won’t have to engage in expensive remedial compliance work.
- Insisting that the additional compliance responsibilities be specified in the lease; should not have a lease clause that includes the open-ended description “including but not limited to” which will give the landlord the right to increase the tenant’s responsibilities at some point.
Regardless of the compliance codes you sign for rentals, ultimately you would be held responsible for any and all safety issues regarding the building. Therefore it’s best to set up an internal audit system in your business to ensure compliance of safety and building codes for the commercial buildings that you manage.
No Compliance Clause
Have a no “compliance with laws” clause for the tenant if you’re a property manager. This type of an agreement is not suggested or recommended as you as the building manager will ultimately be held responsible for anything that the tenant in your building does in regards to compliance and safety.
However, if noncompliance in building codes or safety codes is a result of action by the owner, the landlord or property manager will have to pay for it. Tenants will only pay for noncompliance that resulted from their use of the property or alterations or improvements.
Before using a “No Compliance Clause” it would be best to consult with a real estate attorney to make sure that you are within the legal limits on compliance for the building you will be managing…
Final Thoughts On Code Compliance In A Commercial Rental
In this blog post we covered commercial rental building codes. As the property manager, your commercial rental should follow the building codes to keep your business successfully and legit. Failing to comply with the codes could halt your operation, and even permanently end it.
Building codes exist to help keep the property, the tenants, and the general public safe. Following the codes is not optional.
If you have any questions or thoughts about commercial rental building codes please add them to the comments below.
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