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Leases

Commercial tenants should consider taking professional advice before committing to a full repairing lease, especially if the property is not new and in poor condition.

Commercial landlords should consider taking professional advice in the event that a tenant takes a lease of a building in good repair and condition to ensure it is returned in the same condition at the end of the lease.

A schedule of condition should always be prepared before you renew or sign a new lease on a commercial property. This protects your interests and liabilities when the lease expires.

When taking a commercial lease, it’s good practice to document the condition of a property that is attached and referenced to in the lease’s documentation.

The lease will contain obligations for you to repair and maintain the building to an agreed standard. You may have to put a property into a better condition than it was at the start of the lease, if you don’t accurately record what the starting condition was.

A properly prepared schedule of condition at the outset of a lease can:

• Protect both the landlords and tenants by agreeing the condition of a property and any potential repair work at the outset
• Establish and agree a tenant’s repair obligations for reinstatement work under a lease
• Protect the tenant against claims for existing damage and disrepair caused by a previous occupier
• Avoiding potential disputes and costly dilapidation claims and negotiations during or at the end of a lease
• Limit the tenant’s liability – prevent the tenant from having to put the building into better condition at the expiry of the lease
• Minimise the value of the dilapidations claim served by the landlord at the end of the lease