Leasing of commercial or industrial property and compliance certificates

Compliance certificates are mandatory for any property sale and the rules applied are the same irrespective of the residential or commercial use of the property. However, when leasing commercial property to be used as shops, office space or a factory, fit-outs are often required which may alter the property.

Our Property Law and Conveyancing attorneys are frequently asked whether or not compliance certificates are a legal requirement when any changes are made to the property in terms of electrical, plumbing or gas fit-outs when the said property is being leased.

Below is a detailed summary of the different types of certificates of compliance and explanations as to what is required by law when dealing with leasing of commercial property.

Electrical certificate

The Occupational Health and Safety Act provides that each ‘user’ or ‘lessor’ must be in possession of a valid electrical certificate at all times. Although regulations refer to ‘user’/’lessor’ and not ‘owner’, the description of user/lessor necessarily incorporates the owner of the electrical installation who will also be the owner of the land.

It is however not obligatory to obtain a new electrical certificate where ownership has not changed and no alterations to the installation since the last certificate were made, provided that it is within the two-year validity period. In the event that the lessee installs anything which alters the electrical layout of the property, a new compliance certificate must be obtained by the lessee, unless otherwise provided in the lease agreement.

Water compliance certificate

The Cape Town Water By-Law provides that the owner/landlord of the property must have a valid water compliance certificate. This certificate is valid until/unless changes/alterations are made and is usually renewed each time ownership of property is changed. In the event that the lessee changes or alters the plumbing structure, for example with the installation of new geysers or basins, a new compliance certificate will have to be obtained by the lessee unless otherwise provided for in the lease agreement.

It is important to note that this requirement is only applicable to properties that are situated within the jurisdiction of the City of Cape Town Municipality.

Gas certificate

Pressure Equipment Regulations promulgated under the Occupational Health and Safety Act provides that a new certificate must be obtained with any installation, alteration or modification.

What this means is that for the purposes of leasing, each time a new gas appliance is installed in the property, a new certificate must be obtained.

Lessees should always inspect the premises prior to occupation

It is always recommended that lessees do their inspections prior to occupying the property so that they are well prepared and able to plan in advance for any fit outs that may be necessary to equip the property for purposes of running their business or office.

For help with any compliance certificates or property-related matters, please consult our experienced Conveyancing and Property Law attorneys.

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