Advice for landlords
A landlord must be compensated if the tenant has breached the agreed obligations set out within a lease and the landlord has suffered a loss as a consequence.
We advise landlords that a Schedule of Condition is an essential part of any lease as it establishes the state of a property prior to tenancy. From the landlord’s perspective, the condition of the property is recorded from the moment the lease is signed. So, if it is in good condition, newly decorated and has newly fitted carpets, the tenant would need to ensure it remains that way. If the tenant has made alterations, such as partitions, these can be clearly identified. It helps to ensure that the tenant complies with the covenants of the lease. Our surveyors can provide this service on all commercial properties.
Before signing a commercial lease, tenants should make sure they fully understand the repairing liability. It is vitally important that tenants fully understand their obligations in regard to dilapidations, without this consideration they could stand to lose substantial amounts of money.
Every commercial lease that states the tenant must ‘keep the property in good condition and repair’ also implies that they have a responsibility to ‘put the property into good condition and repair’. This could mean that if the tenant signs the lease on a property with a leaky roof they become responsible for its repair.
A Schedule of Condition resolves this problem as it prevents the landlord from demanding that the property be brought up to a higher standard than its initial condition. The evidence set out in a Schedule of Condition can be used to compare the state of the premises at the end of the contract against the condition at the time the lease was signed.
If a tenant comes to the end of a lease and has a dilapidations claim served, it could cost them a great deal of money. Even on a very small property, such as a high street shop, it could cost between £15,000 and £30,000. A Schedule of Condition could, at the very least, halve that amount if not reduce it to practically nothing. Our experienced surveyors can provide this service.
Ultimately, keeping the property in good repair during the lease will reduce any claim at the end of the term
If you are a commercial tenant we can also complete a dilapidations assessment, which involves identifying works likely to be required at the end of the lease. The assessment allows you to financially plan for the potential claim, reducing the negative impact at the end of the term. In addition, this can also have tax advantages by allowing you to distribute any tax saving across the term.
If you require any further information, or wish to arrange for our team to meet with you, please contact us.