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Corporate Due Diligence

Landlord and Tenant Responsibilities

Clear allocation of responsibilities between landlord and tenant is essential for building safety, compliance and maintenance. Ambiguity in this area often leads to gaps.

Good Practice Landlord, Tenant Pending

Why Responsibility Clarity Matters

In any tenanted building, every component, system, and service must have a clearly assigned responsible party — landlord or tenant. Ambiguity leads to neglected maintenance, safety gaps, and disputes. The lease agreement is the primary document that defines these boundaries, but many leases in Bangladesh are vague on operational responsibilities.

Typical Responsibility Split

Area/SystemLandlord (Typically)Tenant (Typically)
Structure (columns, beams, slabs, foundation)✓
Roof & waterproofing✓
External facade & cladding✓
Common area lifts✓
Common area HVAC (lobby, corridors)✓
Fire protection (sprinklers, alarm, pump)✓ (base building)✓ (tenant fit-out additions)
Electrical — main switchgear & risers✓
Electrical — tenant distribution✓
Generator & fuel✓ (supply)Varies (consumption cost)
Water supply & tanks✓ (base building)✓ (tenant-specific)
Drainage & sewerage✓ (main)✓ (tenant-added)
Interior fit-out & finishes✓
Tenant HVAC (FCUs, splits, VRF)✓
Security — building perimeter & lobby✓
Security — tenant floor✓
Pest control — common areas✓
Pest control — tenant space✓
FSCD Fire Safety Certificate✓
Insurance — building✓
Insurance — contents & liability✓

Common Grey Areas

  • Fire stopping — who maintains fire stopping at floor penetrations when tenant cables pass through? Usually landlord for base building, but tenant fit-out often compromises it without reinstating.
  • Shared HVAC — if tenant uses landlord\'s central system, who pays for filter changes, coil cleaning, compressor repairs? Define in lease.
  • After-hours services — HVAC, lifts, security outside standard hours. Is it included? At what cost?
  • Capital vs. maintenance — roof replacement is landlord\'s capital expense. But what about roof repair? What about ceiling repairs caused by roof leak? Define threshold.
  • Generator fuel — landlord provides the generator; who pays for fuel? Per-unit metering or proportional?
  • Reinstatement — at lease end, must tenant remove all fit-out and restore to original condition? At what standard?

Key Lease Provisions for FM

  • Demarcation schedule — attached to the lease, listing every system/area with assigned responsibility.
  • Service charge definition — what's included, how calculated, cap on increases, audit rights.
  • Access rights — tenant's right to access landlord plant rooms for inspection; landlord's right to access tenant space for maintenance.
  • Compliance obligation — landlord must maintain all regulatory compliance (FSCD, RAJUK) and provide evidence to tenant on request.
  • Notification obligations — landlord must notify tenant of planned maintenance, utility interruptions, or safety incidents.
  • Dispute resolution — agreed process for resolving responsibility disputes (joint inspection, independent surveyor, arbitration).

Bangladesh Context

  • Many Dhaka leases are brief (2–5 pages) and don't detail operational responsibilities. Push for a comprehensive demarcation schedule as a lease annexure.
  • Verbal agreements are common but unenforceable. Get everything in writing.
  • Service charges are often all-inclusive but poorly defined. Insist on transparency.
  • Landlord maintenance quality varies — include performance requirements (e.g., lift availability ≥ 98%, generator ATS ≤ 10s) in the lease.

References & Sources

  1. RICS — Service Charges in Commercial Property
  2. BOMA — Lease Administration Best Practices
  3. IFMA — Facility Management Practices
  4. ISO 41001 — Facility Management Systems

Insights & Guidance

  • Every building component and service must have clearly assigned responsibility — landlord or tenant.
  • The lease demarcation schedule is the definitive document — insist on one as a lease annexure.
  • Common grey areas: fire stopping maintenance, shared HVAC costs, after-hours services, generator fuel, reinstatement.
  • In Bangladesh, leases are often brief and vague — push for detailed operational provisions.
  • Include performance requirements in the lease (lift availability, generator response, maintenance standards).
  • Service charges must be transparent, defined, and capped.

When responsibilities are unclear, critical maintenance falls through the gap. Neither party maintains the fire stopping, the generator doesn't get fuel, the water tanks aren't cleaned. The result is safety risk, service failures, and disputes that cost more to resolve than to prevent. A clear demarcation schedule is the foundation of effective building operations in a tenanted building.

  • Maintenance gap — critical system not maintained because both parties assume it's the other's responsibility.
  • Safety risk — fire stopping, emergency systems, or structural elements neglected due to ambiguity.
  • Cost disputes — unexpected charges for services the tenant assumed were included in service charge.
  • Service failure — landlord doesn't maintain generator, lifts, or HVAC to adequate standard; tenant has no contractual recourse.
  • Reinstatement shock — at lease end, reinstatement costs exceed expectations because requirements weren't defined.

  • Lease agreement with demarcation schedule
  • Service charge budget and breakdown
  • Landlord maintenance records for base building systems
  • Tenant maintenance records for fit-out systems
  • Joint inspection reports (annual recommended)
  • Correspondence on responsibility queries

  • Common area condition — is landlord maintaining to acceptable standard?
  • Fire systems — are base building fire systems maintained and tested?
  • Lifts — reliability, cleanliness, maintenance frequency.
  • Generator — fuel availability, test records, ATS function.
  • Cleaning and security — adequate staffing and quality?
  • Communication — does landlord notify of planned maintenance and outages?

  • Is there a demarcation schedule defining landlord vs tenant responsibilities?
  • What exactly is included in the service charge?
  • Who is responsible for fire system maintenance — base building and tenant additions?
  • What are the after-hours HVAC and lift provisions?
  • Who pays for generator fuel? How is it metered?
  • What are the reinstatement requirements at lease end?
  • What is the process for reporting and resolving maintenance issues?

  • Lease negotiation — CRE advisor or property lawyer for demarcation and service charge provisions.
  • Dispute resolution — independent building surveyor for joint inspection and opinion.
  • Service charge audit — quantity surveyor or accountant to verify charges against budget.
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Disclaimer: This article provides educational information and preliminary guidance. It does not constitute professional engineering advice, structural certification, fire-safety approval, legal advice or statutory approval. Building conditions vary by jurisdiction, design, construction and operation. Qualified professionals and relevant authorities should be engaged where required.

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