Schedules of Condition

Schedule of Condition

If you acquire the lease of a business premises in the UK you may find that you have accepted a ‘repairing liability’. Depending on the wording of the relevant clause, this can mean that you have a duty to leave the property in a better condition than it was at the start of the lease if you don’t record accurately what the starting condition was.
To avoid this, many well advised business tenants are now documenting the condition of the premises before they acquire a lease while ensuring that the lease limits their liability by reference to a Schedule of Condition.

The reasoning behind this is that most business premises in the UK are let on what is called “Full Repairing and Insuring Leases”. This means that the tenant is liable for all the repairs required to keep and put the premises in good condition including such expensive repairs as the replacement of a roof covering, for example.

Avoiding Liability

To avoid the liability of putting the premises into a better condition than they were at the start of the lease, it is necessary to have a professionally prepared Schedule detailing the condition of all the elements of the accommodation and for the resulting schedule to be attached and referred to in the lease’s documentation. Even regarding the smallest of shops or stores, claims can run into tens of thousands of pounds. The cost of preparing a Schedule of Condition at the start of the lease is thus just a fraction of the costs of repairs for which the tenant may otherwise be liable.