Prospective tenants of commercial property may be surprised to find that the standard repairing obligations within a business lease require the tenant to put the premises in repair, then to keep in repair throughout the lease term and also to leave in repair at lease expiry.
This means that the unwary tenant may, upon signing the lease, be immediately liable to remedy pre-existing disrepair, or be liable for an end of lease dilapidations claim that includes items of disrepair not committed during the lease term. Accordingly, the tenant will inherit liability for the former tenant's breaches of covenant.
The only way a prospective tenant can legally avoid this liability is to agree with the Landlord that the lease is to incorporate a Schedule of Condition. This is a document of fact containing a detailed description of the premises together with confirmation of any defects or disrepair existing at the time of the inspection, which usually pre-dates the signing of the lease. A comprehensive Schedule of Condition will also be supported by photographic evidence which will typically run in to hundreds or even thousands of photos illustrating the overall condition of the premises and specific defects or items of disrepair. The repair covenant in the lease will then be modified to accommodate the Schedule of Condition so that it is made clear the tenant is not liable to remedy any defects or disrepair identified in the Schedule of Condition.
The Dilapidations Consultancy undertakes comprehensive Schedules of Condition on all commercial property types for prospective tenants to ensure they do not become liable for defects or disrepair existing prior to lease commencement.
We also act for Landlords in agreeing Schedules of Condition prepared by the prospective tenant's Surveyor.