These are properties which typically will house a business, so a factory, office, café, etc. Usually, they will be let on a long lease (more than 3 years, and maybe as long as 999 years) and there will usually be some responsibility on the tenant to repair, maintain and insure the buildings. This is known as a fully repairing and insuring lease.
The lease is a long document that sets out each party’s rights and liabilities, for the incoming tenant, the section on repairs is of crucial importance. If a new tenant gets this bit wrong, the costs at the end of the lease can be catastrophic. This is because on a fully repairing lease, the tenant will be responsible for almost all defects in the building that are present at the end of the lease.
Problem is, with older buildings, many of those defects will be present at the start of the lease. If the tenant does not know that, and does not negotiate some sort of deal on those defects at the start, he will be responsible for them at the end.
Very few people would buy a house without some sort of inspection first, but the numbers of commercial tenants who take on fully repairing leases in older properties without any form of inspection is frankly unbelievable. In the last two years we have seen several landlords’ claims on small high street shop units with flat above, in excess of £70,000. What defect could you find in a normal house that would cost that sort of money to fix? Yet people frequently sign these leases without any form of check at all.
A Building Survey could be used to bring these matters into the daylight, but a Schedule of Condition can also be used, and has the benefit that it can be appended to and form part of the lease document.
Ring 0151 348 4222 for a free half hour consultation and estimate of likely costs without obligation.
Schedules of Condition
A Schedule of Condition is carried out in order to determine the condition of a property asset so that any existing defects and their repair costs are identified prior to any commencement of a lease or major building alteration, or to assist in forming a maintenance plan.
Depending upon the client’s requirements, the Schedule can record the asset’s principal features only, or may be prepared to a very high level of technical detail.
A Schedule of Condition may be drawn-up for a variety of purposes, including:
As an attachment to a lease, to limit a tenant’s dilapidations liability
By the commissioning or non-commissioning parties in advance of building works
By neighbouring land owners prior to remediation works
In support of Party Wall claims
Costs will depend on the size and complexity of the building and on the purpose for which the schedule is needed.
We can provide advice on likely costs without obligation. Ring 0151 348 4222