If you take on a commercial lease, you are responsible for repairs under a binding contract, which has covenants stating your obligations and liabilities.
If you are taking an FRI (full repairing and insuring) lease, you have a responsibility to put the building into full repair in the first place, and give it back in repair, regardless of the state it was in when you took it. Hough & Co. can provide you with advice on the lease liabilities.
Schedule of Condition
If you can get the lease modified so that you hand back the building no worse than you took it, you need a record of the original condition. A Schedule of Condition is a detailed 'snapshot' of the building on a particular day before commencement of the lease term. This provides a record about existing cracks, dampness, weathering and so on. The report can save costly negotiations at the end of the lease, which would most certainly out way the initial cost of having one prepared.
Schedule of Dilapidations
Repairing clauses in commercial (and residential FRI) leases are enforced through a detailed Schedules of Dilapidations or Wants or repairs. This is a document prepared by us, describing the current condition of the building and setting out the work we consider necessary to bring it back into repair. The tenant may dispute part or the entire schedule, particularly if the lease is subject to a Schedule of Condition, and surveyors acting for both parties will negotiate to reach an agreed scope of works.
If the lease is still running (an Interim Schedule of Dilapidations) the work will be organised by the tenant's surveyor and checked by the landlord's surveyor.
If the lease has expired (a Terminal Schedule of Dilapidations) the two surveyors will negotiate a financial settlement to allow the landlord to repair the building ready for the next tenant.
Hough & Co. take instructions from Landlords and tenants, and negotiate either a financial settlement or agree the scope of works necessary to terminate the lease agreement.
Schedule of Dilapidations Liability
License for Alterations
Appointments are generally carried out on behalf of landlords to review tenant’s proposals for adaptation and fitting out of properties in order to comply with lease documentation. Upon vacation of the properties at lease end a further inspection will identify repairing liabilities under the terms of the license previously granted.