Editorial for Bishop's Stortford Citizen w/e 13th October 2000

Full repairing leases
report by John Gearing FRICS

As the demand for commercial premises improves with the strengthening of the economy, landlords are resorting back to 'full repairing and insuring' Leases. During the early part of the 1990's, following the recession, premises were difficult to let and consequently landlords were happy to let tenants into occupation on almost any terms, including short term licenses with no repairing obligations at all.

Understandably landlords will look to let their commercial premises on full repairing terms, preferring to pass this responsibility to the tenant wherever possible. In considering a return to full repairing leases, tenants must be aware that the premises need to be returned to good repairing condition at the termination of the lease and that landlords can take action to enforce repairing covenants during the term of the lease if it is likely that the lack of repair will ultimately affect the value of the reversion.

Tenants might also like to consider the fact that some landlords through their solicitors require tenants to 'put in good repair' as well as 'keep in good repair'. The acceptance of such terminology in the lease must be treated with caution as this places the tenant in the position of having to deal with any inherent defects which may be present at the time the lease is signed. This may be somewhat unfair on a tenant who fails to have a 'Structural survey' before signing a lease and therefore is totally unaware of his obligation to deal with defects that may exist on day 1 because of the landlord's negligence or failure to repair.

If in any doubt prospective tenants are advised to have a 'Schedule of Condition' prepared by a suitably qualified surveyor at the time the lease is signed, recording the exact condition the premises were in at the time the lease commenced. Such a schedule should include, if necessary, a photographic record of any specific items of disrepair or doubtful condition. The landlord and tenant will then have an agreed record of the condition of the property at the commencement of the lease and a document of reference for any dilapidations at the termination of the lease. Gearing and Company survey department have recently carried out a terminal inspection of a factory where the tenants were most surprised to find they would be responsible for putting the property back into 'as new' condition and expected fair wear and tear to be appropriate. Tenants are advised that normally there is no account taken of any fair wear and tear in commercial leases.

For further advice on leasehold dilapidations contact Gearing and Company, survey department.

© Gearing & Company 2003 - All rights reserved
Designed by Experts Computer Services