What are my responsibilities for maintenance and repair during the lease?
It depends on the terms of your lease, however, you will usually be responsible for some repairs and redecoration during the term of your lease. These may be limited to the internal parts of the building or may also include the external parts, such as the roof, windows and exterior walls of the building.
Usually, you will also be required to keep any of the landlords’ fixtures regularly tested and serviced including, for example:
- Fire safety systems, for example detectors, alarms, lighting and extinguishers
- Electrical installations
- Air conditioning
- Gas installations
- Heating installations
- Extraction equipment
If you fail to address statutory requirements, you are likely to be in breach of your lease terms.
You may also have to contribute towards maintenance and repair of any communal areas such as access roads or car parks.
You could also be responsible for paying business rates, utilities and insurance costs, including shop-front insurance if applicable.
If you do not keep the property in good repair, you could become liable for additional legal and surveyor fees if the landlord takes action to address the disrepair.
Understanding the specific requirements of the lease is essential as you may become responsible to put parts of the building into repair even though they may already be in poor condition.
What happens at the end of my lease?
Most landlords will usually stipulate that the building is handed back in at least the same condition it was before the lease, and that you have undertaken the repairs and redecoration you agreed to do. You may also be required to remove any alterations you have made and reinstate the premises to how it was at the beginning of the lease.
Normally, the landlord’s surveyor will inspect the property shortly before or after the lease ends and prepare a schedule of dilapidations. This schedule will list any items of disrepair, the repairs which are required and their expected costs.
If the schedule is served before the end of the lease, you may choose to undertake those works or, alternatively, agree a financial payment to the landlord so that they can take care of them after you leave. If the lease has already ended, you will normally have to negotiate a financial payment or appoint a surveyor to do this on your behalf.
What costs are involved at the end of a lease?
When a lease comes to an end, particularly if you are not handing back the property on the final contractual day of the lease, you might incur some legal fees, for example to ensure that any notices to terminate the lease are compliant with legislation and the lease requirements – this is particularly important if enacting a break clause.
If you have not kept the property in the condition required by the lease, you are likely to be liable for surveyor fees and legal fees to prepare and serve a schedule of dilapidations.
You will also be required to pay for work needed to remedy disrepair. Dilapidations costs commonly run to £10,000s or even £100,000s. This is why it is important to engage a surveyor at the start of the lease, as they can help you to significantly reduce your exposure to such lease end costs.
For longer leases, you might also need to lodge paperwork with Land Registry, for a small fee.
Do I really need a surveyor? It’s all extra costs.
Working with a surveyor to inspect your premises before you take on a lease, and to oversee your fit-out project, can help to save costs overall, by advising on any issues before you commit, and by recommending how best to design the fit-out to suit your budget.
They can help to significantly reduce your exposure to lease end costs.
They will also save you a significant amount of time by dealing with the contract administration and fit-out project management on your behalf, allowing you to focus on your core business; giving you back the time to do what you do best.
Also, it’s important to remember that, without the help of a surveyor, you could end up in breach of statutory requirements, which could be very costly if enforcement action is taken.
Now I know what I need, what are the next steps?
You should get in touch with Harrison Clarke. We have used our wealth of experience in commercial property to offer a unique pre-lease due diligence ‘Leaseholder Survey’.
This combined building survey and dilapidations cost assessment reports on your lease obligations, the current condition of the premises and the potential costs of repair. We also highlight any statutory and legal compliance issues, and set out possible mitigation strategies to reduce the likelihood and cost of lease-end dilapidations claims.
Our report is presented using an easy-to-understand format, and focuses on any negative items which we feel may affect your occupation. We have found that this approach offers a more cost-effective approach, being about 30% cheaper thanone third to one half of the cost of if you arranged arranging a separate full building survey and dilapidations cost assessment.
Where buildings are of a more complex nature, or you are occupying a building for a longer term, we also offer commercial building survey or dilapidations cost assessment services.
Please contact our team of friendly and highly competent surveyors, who will be delighted to help you.
Call 023 8155 0051