Commercial Leases

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It is good practice for a tenant to obtain a Schedule of Condition, which must be added to the lease at the onset of tenancy. The primary purpose is to use the schedule in the defence of a dilapidations claim at the end of the term, in an attempt to limit the repairing obligation of the tenant.

The best use of a Schedule of Condition is on a short lease, where the extent of disrepair arising during the term can be more easily identified and rectified. They are often of little use on long leases, however, as in general terms, the condition of the property at the outset, whether good or bad, does not determine the extent of the tenant’s repairing liability. For example, carpets referred to as worn or stained will undoubtedly wear further. Over a long period, replacement will be almost inevitable in which case a schedule recording the original condition will be worthless.

A pre-tenancy Schedule of Condition will simply record the state of the property at that particular time. It will not normally discuss the causes of defects, make comparisons with previous condition, or predict future deterioration. It is a snap-shot rather than a survey. The Schedule will concisely identify the building’s elements, describing the materials and construction, and their condition. Essential to the preparation of a clear Schedule of Condition is a comprehensive photographic record.

For longer leases, we would advise that a structural survey commissioned by the incoming tenant would serve a better purpose than a Schedule of Condition. It will alert the tenant to any immediate disrepair, which can be brought to the attention of the landlord and therefore addressed before the onset of the tenancy.

The fundamental purpose of a Schedule of Dilapidations is to identify any alleged breaches of the repairing or other covenants, resulting in the need for repairs. It is usually commissioned by the landlord at the end of the lease, but can be issued during the term. The schedule will contain an inventory of disrepairs to the demise, with suggested remedies and usually also the associated costs.

We are also able to provide commercial Lease Plans for submission to the Land Registry and incorporation into the lease.