Leasing a commercial property

If you are renting or leasing a commercial property you will have to sign a lease. That lease is usually for a given number of years. The lease will be fully repairing and insuring. This means exactly what it says on the tin – that you are responsible for the buildings insurance (which you usually pay as a premium directly to the landlord as part of the monthly rent). You are then responsible for all repairs. What we are going to do is explain a couple of past case histories.

Mary leased a shop in the centre of York and she had a fully repairing and insuring lease on that shop and stayed there for over ten years. When it came to the end of the lease she became responsible for £16,000 worth of repairs. This came about because the landlord is rightly entitled to send in their own surveyor and ascertain the condition of the property at the time the lease expired. Subsequently Mary did not undertake her own inspection of the property when the lease began ten years ago. If Mary had undertaken the lease then she would have been able to set off a number of things.

So for example, at the time of inspection the property may have been suffering from dampness, it may not have been adequately re-wired and the joinery, brickwork and roof may have needed repair. It is exceptionally important to record these repairs in a schedule. Usually the Schedule of Condition is attached to the lease. In most cases the landlord will take into account your schedule and often exclude these items of repair. So therefore when it comes to the final day of leaving the property you will not be forced to pay a large bill to the landlord. Incidentally in the case of Mary, when we asked her why she didn’t undertake a Schedule, she was informed by her legal adviser that she didn’t need one. This is a popular misconception.

Let’s look at the next case. Wendy’s Apple Pie (names changed to protect identity) took on the lease of a large property in Leeds. Obviously the purpose of her lease was to produce apple pies and sell them to make a profit and earn a living. Subsequently Wendy was tuned in enough to instruct for a Schedule of Condition to take place, and after eight years Wendy decided to move on to new premises because the business was expanding.

The landlord sent in their own surveyor but because Wendy had undertaken a Schedule of Lease there were very few repairs that needed doing, in fact just the opposite, Wendy had improved the property.