When considering a lease of a commercial property, it is important for a prospective tenant to understand that, dependent upon the terms of a lease, a landlord can seek to make a claim at the end of the term for items of disrepair or unauthorised alteration, including any items of disrepair that may exist before the lease is taken.
This is known as a dilapidations claim and can run into thousands of pounds at a time when an organisation may need capital and time to focus on the next stage of their business plan.
Unlike a Commercial Building Survey, a Commercial Schedule of Condition is not a diagnostic report intended to be a detailed evaluation as to the defects, remedial works and future maintenance issues. It is a written tabulated schedule that sets out the condition of the building element by element, area by area, is accompanied by comprehensive photographs and is used as a benchmark of the condition at the time a lease is taken. The value of this is in providing documentary evidence of the condition at the start of the lease.
This is essential for you as a prospective tenant who will have a liability to hand the building back in its original condition at the end of the lease term. It will help limit and resolve issues of liability for alleged disrepair or alterations at the end of the lease term. Again, saving time and money. With input from your solicitor it is advisable to seek to negotiate that the schedule be appended to the lease with a clause that requires that the building be handed back in no better condition than as set out in the schedule.
For a Landlord who has invested in bringing a property into good tenantable condition prior to letting, with a tenant that has not maintained the building, it will help to justify and resolve a claim for dilapidations at the end of the lease. This can save time and money in resolving alleged disrepair and associated legal fees.
A Commercial Schedule of Condition can be carried out instead of a Commercial Building Survey or, where the benefit of both is relevant, they can be carried out in tandem.
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