This is a clause in the lease stating which party is responsible for complying with statutes that affect the property and the tenant’s occupation of it.
The overarching purpose is generally as far as possible to shift responsibility for statutory compliance from the landlord on to the tenant. This also gives the landlord a direct right against the tenant for breach of covenant if the tenant does not comply with this obligation.
The lease will likely contain a definition of laws or statutes, which should include:
This should also include any changes to the laws during the term of the lease.
Although not necessary, a compliance with laws clause often also includes reference to a number of specific statutes. The justification for this is for the landlord to draw the tenant’s attention to particular legislation and also provides the landlord with an opportunity to add any further obligations on the tenant.
The type of legislation that may be specifically referred to includes:
In a lease with a very short term a tenant may be able to successfully argue that such a clause should be removed from the lease.
If not and in most cases, the tenant will want to ensure that it only needs to comply with statutory obligations relating to its use and occupation of the property. A tenant will also be keen to ensure that the clause does not require them to incur any capital expenditure or improve the property when complying with a statutory obligation and that the landlord should be obliged to comply with these requirements.
If you need any advice on statutory obligation clauses, please contact a member of our commercial property law team in confidence here or on 02920 829 100 for a free initial call to see how they can help.
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