We’ve already talked about this, but it needs some more discussion. If someone is injured and the injury is related to your lease or if there is property damage, then the lease plays a key role in deciding who pays. You and your landlord should have insurance to cover these claims, but these sorts of things still take a lot of your time. They also cause a lot of anxiety. So you’ll want to minimize this as much as possible.
The lease will normally specify how liability should be divided between the parties. If it doesn’t, then the law will decide liability.
One way to divide liability is to base it on the percentage that each party is at fault. But this requires lots of litigation.
Another way to do this is to base liability on parties and property regardless of fault. Each party takes care of their property, contractors, and employees. This lessens intensive fact-based fights. There are a few other things to consider in this arrangement such as worker’s comp claims. You also need to make sure that each of you purchases insurance to cover your liability and each party is named as an additional insured on each other’s policies if someone tries to tag you for something that the other person has assumed liability for. That way your defense costs can be covered. Then if a third-party is injured, the landlord and tenant are liable for the injury to the extent of their fault.