Where a leasehold property is not in full repair and good decorative order, and does not have new or recent fixtures and fittings at the outset, landlords will sometimes agree that the tenant's repairing obligation may be  limited to keeping the property and the fixtures and fittings  in no worse state of repair than its current state as at  the date of the commencement of the lease.

In order to establish the baseline condition at commencement, a comprehensive schedule of condition should be prepared so that there is an agreed record of the condition at the commencement of the lease, and which will act as a reference point for the standard of repair and maintenance that is required when the lease ends and the property is handed back to the landlord.

Key issues for both parties are:

  • The party responsible for cost of, and responsibility for, preparing the schedule of condition should be negotiated as part of the initial heads of terms, and a reputable qualified surveyor used to prepare the schedule.
  • The schedule should contain a detailed description of the specific condition (and any defects) of all parts of the property for which the tenant is to be responsible. This should comprise not only photographs, but also a narrative which clearly sets out the want of repair. In all but very basic property leases photographs alone are rarely sufficient to interpret the requirements of a repairing covenant if a dispute arises.
  • The schedule should be checked thoroughly andboth parties need to be satisfied that it covers all the relevant issues;
  • The schedule should be physically annexed to the lease and referred to in the body of the lease in the repairing covenant clause.Whilst schedules can be unwieldy, if they are not physically bound into the lease, they may be lost and the finally agreed version may be difficult to identify on termination of the lease;

If the original parties to a lease take the above steps, the risk of disputes over the requirements of repairing covenants and dilapidations claims at the end of the lease can be reduced considerably.

The above article is published for information only and does not constitute specific legal advice. For specific legal advice on repairing obligations in leases or dilapidation claims contact commprop@prettys.co.uk