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Repair the way you negotiate

Agreement Business Businessmen 886465

At the forefront of most tenants’ minds when negotiating a lease is one thing and one thing only, how much is the rent?

Within the heads of terms the extent of one’s repair obligations are often swallowed up in the old acronym “FRI”, full repairing and insuring to you and me. But what does this mean in practice and how can you avoid any costly surprises?

The Property

Most repair clauses will refer back to the “Property”. The clause will, for example, say that the tenant must “keep the Property in good repair and condition”. Notice the capital “P”, this means flick back to the definitions section of the lease. If you’re required to keep the Property in good repair you need to know what exactly the Property is. This definition can be very detailed, all the way down to the plaster board, floor screed, internal doors etc. Equally, it could be the postal address.

The key point is to know what you’re taking on as the “Property” otherwise you may have a shock when you’re asked to repair parts of the building you didn’t know you were letting.         

Practically, rather than waiting for the lawyers to hash it out, start these discussions early. Be clear with the landlord as to exactly what you will be taking on as the “Property”.

What if the Property is not “in repair”

Simply put, if you take on a Property not in repair then you could potentially be obliged to put the Property in repair on day one of the lease. This means you could face a hefty bill before the ink is dry.

The message here is to get a survey. If this shows the Property is not in repair you may be able to get the landlord to agree to limit your repair obligation to a Schedule of Condition.

Landlord’s Repair Obligations

The landlord, especially on leases of part of a building, will likely maintain structural and common parts. The landlord will usually charge this cost back via the service charge. Get these figures from the landlord as early as possible so that you can factor these costs in. By the time the management pack is with the lawyers you may have spent months negotiating only to find out the service charge is sky high and there’s no room for a cap.

For advice on all aspects of lease agreements call me on 0161 672 1442 or email richard.bradbury@slaterheelis.co.uk

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