Who Owns the Building and Who Carries the Risk?

In my previous piece, I wrote about Base Face Pizza on Kew Road in Richmond. The restaurant opened in June 2025 but has apparently been unable to trade since around February or March 2026 because of flooding in its basement.

According to its owners, water began coming through the floors and walls because of a structural problem with the building. They say the people responsible for fixing it have been dragging their feet.

We do not know the precise terms of Base Face’s lease or exactly which party is legally responsible. It could involve the landlord, freeholder, building manager, insurer, residential leaseholders above the restaurant or some combination of them.

That uncertainty is part of the problem.

A business can pay to occupy a building, invest in fitting it out, employ people inside it and depend entirely upon it—without necessarily possessing the authority to repair a serious structural problem.

Everybody can have a contractual position while the shutters remain down.

The British commercial-property model

Residential and commercial tenants occupy two very different legal worlds.

If you rent a home in England, including from a council or housing association, the landlord is ordinarily responsible for its structure and exterior. That includes walls, roofs, drains and much of the plumbing. The tenant is generally responsible for ordinary care and damage they cause.

The problem in residential and council housing is often enforcement: delayed inspections, outsourced maintenance, arguments over the source of damp or damage and tenants being passed between departments.

Commercial premises are different.

In Britain, the lease is frequently the starting point and can transfer extensive responsibility to the business. Under a full repairing and insuring lease, a commercial tenant may become responsible for maintaining and repairing most—or potentially all—of the premises while also contributing towards the building’s insurance.

In a multi-occupancy building, the landlord may retain responsibility for the structure and common areas but recover the costs through service charges. In a standalone shop, the tenant may assume far wider obligations.

The owner retains the appreciating asset. The occupier can inherit much of the cost and physical risk associated with using it.

The business pays for almost everything

Then there are business rates. These are charged on most non-domestic properties and are generally paid by the occupier. A small business can therefore pay rent to the landlord and a separate property-based tax to the state simply for using the premises.

The government changed the system again in April 2026. The temporary 40% relief for retail, hospitality and leisure ended and was replaced by permanently lower multipliers for qualifying premises. The government describes this as support for the high street.

However, a new revaluation arrived simultaneously. Because bills are calculated using both a property’s rateable value and the relevant multiplier, a lower multiplier does not guarantee that every business receives a lower bill. Transitional relief can limit an increase, but limiting an increase is not the same as eliminating it.

Employer National Insurance added another pressure from April 2025. The employer rate increased from 13.8% to 15%, while the annual threshold at which employers begin paying fell from £9,100 to £5,000.

The expanded Employment Allowance protects many smaller employers, while separate rules mean employers ordinarily pay no employer National Insurance for workers under 21 earning below the relevant upper threshold. It would therefore be inaccurate to say that the full increase applies directly to every teenager taking a Saturday job.

But restaurants and shops do not employ only sixteen-year-olds. The wider increase in payroll costs affects staffing levels, opening hours and whether businesses take a chance on additional workers at all.

Britain taxes businesses for occupying buildings and for employing people inside them. Its commercial leasing culture may also require those businesses to maintain assets they do not own.

Then we wonder why the high street is struggling.

Is Britain simply more expensive than everywhere else?

No. That would be too easy—and it would not be true.

France, Germany, Norway, Portugal, Spain and Hungary all structure commercial property and employment costs differently. Some impose considerably higher employer contributions than Britain. But they also make different choices about what those contributions fund and where responsibility for the physical building begins.

France: responsibility follows ownership

France provides the clearest contrast.

Under the French commercial-leasing system, tenants usually remain responsible for routine maintenance and damage connected to their occupation. However, major structural works identified under Article 606 of the Civil Code remain with the landlord.

For commercial leases entered into or renewed since November 2014, the cost of these protected major repairs generally cannot simply be transferred to the tenant through the lease.

The landlord must also provide information about major works completed during the previous three years and anticipated during the following three. This gives a prospective tenant greater visibility of the physical asset they are preparing to occupy.

France is not a cheap or simple place to employ people. Employer social contributions can be substantially higher than in Britain, although exemptions and reductions—particularly around lower-paid employment—mean one headline percentage does not describe every worker.

But those contributions also finance a different social system. Crucially, higher employment costs are not accompanied by the same freedom to make a small business financially responsible for every major structural element of somebody else’s property.

France’s basic principle is clearer: if you own the structure, certain structural obligations remain yours.

Germany: the landlord starts with the building

German statutory law also begins with the landlord being responsible for maintaining and repairing the leased property.

Commercial leases commonly divide responsibility so that the tenant maintains the interior while the landlord retains the roof, structure, exterior and common areas—the “Dach und Fach” principle.

Contracts can allocate costs, and German businesses are certainly not protected from every repair bill. Nevertheless, German courts scrutinise standard clauses that impose unlimited or unreasonable liabilities. Some cost-recovery provisions require caps, particularly where a tenant could otherwise be charged for defects it did not cause.

Property tax legally attaches to the owner, although landlords commonly recover it from occupiers through operating charges.

Germany therefore does not remove the tenant’s costs. It starts from a clearer separation between maintaining the business’s internal space and maintaining the owner’s underlying asset.

Norway: landlord responsibility as the default

Norway’s Tenancy Act begins from the position that the landlord must maintain the premises in the agreed condition. A tenant can require the landlord to repair a defect at the landlord’s expense, subject to reasonable limitations.

Commercial parties have considerable freedom to alter that position through their agreement. Norwegian business leases commonly make tenants responsible for internal surfaces, fittings, visible pipes and ordinary maintenance.

However, major structural elements and shared building systems ordinarily remain on the ownership side unless the contract reallocates them.

Norway’s standard employer contribution is approximately 14.1%, with lower rates in certain less densely populated regions. That is close to Britain’s headline employer-National-Insurance rate, although the systems and benefits funded are not identical.

The Norwegian comparison is useful because it demonstrates that stronger landlord responsibility does not automatically require French-level payroll charges. These are separate political and legal choices.

Portugal and Spain: landlord responsibility, but contractual freedom

Portugal makes the landlord responsible for repairing the property and maintaining common areas by default. In commercial contracts, the parties may move some of that responsibility to the tenant.

In practice, ordinary maintenance generally sits with the occupier while extraordinary and structural works commonly remain with the landlord. Portuguese law may also allow a tenant to arrange genuinely urgent repairs and seek reimbursement where the landlord fails to act.

Spain follows a similar pattern. Under its Urban Leases Act, the landlord is initially responsible for maintenance and repair, while the tenant pays for minor repairs caused by ordinary use.

However, commercial parties can negotiate a different allocation. Spain therefore provides less absolute protection than France and, depending on the lease, a Spanish commercial tenant can still assume substantial costs.

Both countries generally place their principal municipal property taxes—Portugal’s IMI and Spain’s IBI—on the owner, although contractual arrangements and rent levels can pass the economic burden indirectly to the occupier.

Their employer social contributions are higher than Britain’s headline rate. That is a genuine cost to opening and expanding a business and should not be ignored.

The distinction is not that businesses in Portugal or Spain receive a free ride. It is that ownership taxation and structural responsibility begin more clearly with the owner.

Hungary: a lower-cost alternative

Hungary provides a different comparison again.

The landlord is responsible by default for structural repairs, central systems and common areas, while the tenant maintains its internal premises and any equipment it has installed. Contracts can vary this division, but the legal starting position remains important.

Hungary’s employer social contribution is approximately 13% of gross salary—below Britain’s headline 15% rate—and its corporate-tax system is comparatively light.

It shows why the argument cannot be reduced to “Europe is more expensive”. Europe contains several different models. Some demand higher employer contributions and provide broader social protections. Others combine lower employment taxation with clearer property-owner responsibilities.

Britain has made its own choices.

What must be paid before the first pound is earned?

I have thought about opening a business in this country for a long time.

But whenever I examine what it would actually involve, I arrive at the same question: how much money must I hand over before I have made a single pound?

There is the deposit and advance rent. Legal fees. A survey. Fit-out costs. Planning and licensing. Insurance. Equipment. Stock. Energy. Waste collection. Business rates. Service charges. Wages and employer contributions.

If I sign the wrong commercial lease, I could also become responsible for repairing parts of a building I do not own.

It begins to feel like daylight robbery. What exactly is the incentive?

We constantly tell people to become entrepreneurs, create employment and bring life back to their communities. But the system requires them to arrive with enough capital to survive months of bills, mistakes and delays before the business has built a reliable customer base.

I cannot prove that this structure was consciously designed to exclude ordinary people. That is my opinion.

But designed or not, that is its effect.

It favours people who already possess money, property, investors or family capital. It favours people who can afford to lose before they need to win. Everybody else is advised to take the risk while carrying obligations that established wealth is better positioned to absorb.

Britain celebrates entrepreneurship culturally while making entry financially punitive.

The high street is the final symptom

This brings us back to Base Face Pizza.

Here is a business that found the capital, signed a lease, renovated a unit, bought equipment, employed people and opened its doors. Less than a year later, it reportedly became unable to trade because of a structural problem in the building.

The restaurant loses revenue. Employees lose shifts. Suppliers lose orders. Neighbouring businesses lose passing trade. The local authority loses economic activity. The street gains another shuttered frontage.

Then we describe the result as a “dead high street”.

We talk about young people no longer finding Saturday jobs as though teenagers collectively decided they no longer wanted them. But Saturday jobs require businesses with sufficient confidence, capacity and cash to employ somebody who needs training.

A restaurant trapped behind shutters cannot employ anyone.

Neither can a butcher, deli or independent shop that never opens because the prospective owner calculated the rent, rates, payroll, import costs and contractual risk—and sensibly decided not to proceed.

Other countries do not eliminate negligent landlords, expensive premises or failed businesses. France, Germany, Norway, Portugal, Spain and Hungary all have disputes, vacancies and high streets under pressure.

But their systems demonstrate that Britain’s arrangement is not inevitable.

The state could tax ownership rather than occupation more heavily. It could restrict the transfer of major structural liabilities. It could give commercial tenants clearer rights when premises become unusable. It could reduce the penalty attached to employing people at the lower end of the labour market.

Instead, Britain allows the business to pay the owner for the building, pay the state for occupying it, pay to employ people inside it and potentially pay to maintain the asset itself.

If the business carries the cost of occupation, employment and potentially the building’s physical condition, what exactly does ownership oblige the landlord to do?

Until we answer that, government promises to revive the high street will remain what they usually are: another attempt to treat the symptom while protecting the system that produced it.