Commercial Surveys -
including Schedules of
Condition and Dilapidation
What do you need?
Purchasing a Freehold Property?
You should consider a Building Survey. We provide detailed inspections
and reports at three levels - see
Residential Surveys page.
Taking a Lease? Then
there will be a formal lease document. If you haven’t seen it yet,
then get a copy as soon as possible. Refer to the part of the lease
dealing with "Tenants Covenants". One of these covenants will
probably be along the lines of "The tenant covenants to put into
and keep in repair the demised premises etc etc". Besides another
two paragraphs referring to inside and outside redecoration you may also
find a clause stating that "The tenant will yield up the demised
premises in good repair at the termination of the lease, howsoever
arising". The effect of these covenants is that the liability for
repairing and maintaining the building will be yours as from the day you
sign the lease. It doesn’t matter if the building is falling down - it’s
still your problem. What’s more, you have to give the building back to
the Landlord at the end of the lease in full repair and completely
redecorated, both inside and outside. At the end of the lease the
Landlord will probably instruct his surveyors to inspect the property
and to prepare a Schedule of Dilapidations. This is essentially a list
of work that you have to do to satisfy the repairing covenants. It is
not a defence to say that the building was in poor condition at the
commencement of the lease.
What should you do to protect yourself against huge
expense at the end of the lease? You have a choice.
A Building Survey might be appropriate (see Residential
Surveys page for different types). Knowledge is power. If the report
shows the building to have significant defects and to be in poor
condition, you may be able to renegotiate the terms of the lease,
negating or reducing the impact of the repairing covenants. Sometimes a
Landlord will agree to the insertion of a qualifying clause in the lease
to the effect that "the tenant shall not be obliged to leave the
premises in any better condition than existing at the commencement of
the lease, the condition being as described in the Schedule of Condition
attached to this lease". Now you need a "Schedule
of Condition" - see below for details.
An alternative to a Building Survey is a "Trial
Schedule of Dilapidations". The depth of the inspection is much
the same as for a Building Survey but the report is prepared in a
column/table format (with approximate costings) as if the lease was now
terminating. What you get, therefore, is a concise picture of the
condition of repair of the premises and an idea of the extent of the
financial liability that you are accepting if you proceed with the
acquisition of the building on full repairing terms.
If the lease is to be qualified to the extent that
"the tenant shall not be obliged to leave the premises in any
better condition than existing at the commencement of the lease",
then you need a "Schedule
of Condition". This is prepared in a similar manner to a
Schedule of Dilapidations (see above) and has a large number of
photographs attached to illustrate the text. The Schedule is then agreed
and signed by Landlord and Tenant. At the end of the lease this document
can save the tenant many thousands of pounds. However it is useless to
commission a Schedule of Condition unless the landlord has previously
agreed to qualify the repairing covenant as described.
Are you a Landlord? We can investigate repair
problems for you at any stage of the lease and serve repair notices upon
the tenant if necessary. At the end of the lease we can prepare the
necessary "Schedule
of Dilapidations". Ideally you should arrange for this to
be done at least 6 months prior to the termination of the lease. If you
leave it too late the tenant may claim that he hasn’t had sufficient
time to carry out the works on the Schedule.
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Commercial Surveys