What does good and substantial repair and condition mean?

When dealing with leases for tenants of private and commercial properties, good and substantial repair generally means the property is left in the expected condition. This will be in accordance with the lease requirements. Where this can get sticky for tenants is that occasionally there are terms within the lease that dictates the tenant is obliged to put the property into good repair initially – even if they are not responsible for the disrepair -  and then maintain it. In this blog, we will discuss what that means in the context of a commercial lease and briefly touch upon private residential.

The importance of your lease

A common perception of renting or leasing a property is that there is an expectation that you will need to carry out repairs at the end of your lease. These tend to be referred to as dilapidations and are written into your lease. The safeguards that are in place in the residential market, offer no such protection for the tenant in commercial leases so it is incredibly important to get this right from the start.

Protecting your exposure

One of the ways that tenants of commercial properties can protect themselves is by carrying out a full survey of the property before they enter a lease. If the lease covers the whole of the building, not just the interior, a tenant can be liable for repairs to the exterior and structure of a building. A tenant could therefore find themselves in a situation where they reach the end of a short-term tenancy agreement and are presented with a bill of thousands of pounds for the roof for example. This can happen even if the roof is in poor condition at the start of the tenancy agreement. Drone technology now means that a roof inspection can take place at the start with limited costs and produce a schedule of conditions that limit your liability.

Schedule of condition

The imagery that is taken to document the state of repair and condition of the property is important as it highlights any areas of disrepair before the lease commences. It may then be possible to build a repairing clause into the lease to safeguard the tenant against responsibility for potentially major issues that existed before the agreement was put in place. Without a schedule of conditions, the tenant may be liable for future dilapidations claims, and therefore the more detail in the schedule of conditions the better.

What does good and substantial repair and condition mean?

At the start of this blog, we defined good and substantial repairing conditions to mean that the property is in the expected state. Where this potentially gets sticky is ensuring from the outset both parties understand what that condition is and clearly define who is responsible for what aspects. From the point of view of the tenant, whilst it is critical that both parties check their insurance thoroughly to understand what is covered, once again the tenant must be aware that risks that are omitted will be seen by default as their responsibility.

If you are in the Portsmouth and Hampshire area, we can help you with your dilapidations, get in touch for your works today.

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