By Agata Marosz, Solicitor, Penman Sedgwick LLP
The repairing obligations in a lease usually require a tenant to keep the property demised to the tenant by the lease “in repair”. Tenants need to be aware that a covenant to keep the property in repair includes an obligation to put the property into repair.
To put it simply, this means that if the property is in a poor state of repair when the lease is granted, the tenant will be obliged to put the property into repair and then keep it in repair. The tenant should therefore inspect the property carefully before taking the lease to assess the cost involved in dealing with any existing disrepair.
The tenant may wish to limit the repairing obligations so that the tenant is not responsible for any existing disrepair – in effect, the tenant is not then obliged to put or keep the property in any better state of repair and condition than it is in at the date the lease is granted. If the landlord agrees to this, they should have a “Schedule of Condition” annexed to the lease – namely, a report containing photographic and written evidence of the state and condition of the property at the time the lease is granted. This Schedule of Condition will need to be agreed between the parties and kept with (and preferably attached to) the lease for future reference. It is important that the photographs are of good quality and that any description of them is sufficiently detailed so that it is clear what they relate to.
The benefit of having a Schedule of Condition in the lease is that the limitations on the tenant’s repairing liability are clearly evidenced by the Schedule. Nevertheless, it is necessary to point out that a Schedule of Condition will only document visible defects. Therefore, in order to limit or exclude the tenant’s liability to non-visible defects, a tenant should also consider commissioning reports in relation to items such as plant and machinery.
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