Schedules of Condition
A Schedule of Condition is critical for a tenant taking a lease of a commercial property. We have seen far too many businesses feel the sting of a large dilapidations claim at the end of their lease. A thorough and well presented Schedule of Condition which is referred to in a lease with the correct wording will protect a business tenant against unsubstantiated Dilapidations as well as inform the tenant of the condition of the property which they are about to commit to.
A standard FRI lease often imposes on the tenant full responsibility for the upkeep, repair and renewal of the premises and ensuring that it is decorated during and at the end of the term and complies with all appropriate legislation.
In an FRI lease, the tenant carries the obligation to repair the premises even if the defect or damage requiring repair was present before the tenant took the lease. It’s also important to highlight that “repair” can include renewal and rebuilding, therefore it’s easy to understand why tenants would be keen to limit the scope of this expensive obligation.
A decent Schedule of Condition will ordinarily be prepared by a chartered surveyor and will include photographs and written descriptions, together documenting the condition of the property. The tenant will wish to ensure that the Schedule clearly shows the defects, by referring to the precise location and extent of the defects – the photographs and text must be specific enough to allow the defects to be identified in the future.
A tenant would be well advised to invest in a Schedule of Condition properly prepared by a chartered surveyor, as a poor record of the condition of the property will do no favours to a tenant when a landlord enforces the tenant’s repair obligation under the lease and serves a dilapidations claim.