FAQs About Litigation and Dispute Resolution: My commercial lease says it is a full repairing lease – what do I have to pay for?
In the second mini blog in this series of FAQs about Litigation and Dispute Resolution, Maeve England, Partner in our Bath office, looks at the different ways property repairs are dealt with in the different types of property leases.
As specialists in commercial property disputes, we are frequently asked what the term “full repairing lease” means. The question often comes up when the tenant is moving on and has been presented with a sizeable “dilapidations” (repairs) bill.
If your lease is of a whole building, the term “full repairing lease” will mean that you have full responsibility for the repair of the whole property. That means that you will have to pay for repairs yourself.
If the lease is of part of a larger property, a “full repairing lease” places direct responsibility on you for repairing the demised premises – i.e. the part of the building included in your lease. However, in a full repairing lease you will also be indirectly responsible for the cost (or a proportion of the cost) of repairs to the structure, exterior and common parts of the property through the service charge.
What if my lease says “keep the premise in repair”?
Many tenants could be forgiven for thinking that a covenant to “keep the premises in repair” means that their responsibility is limited to keeping the premises in the same state as they were in when they acquired them.
However, perhaps counter-intuitively, a covenant to keep a property in repair means that you actually have an obligation to put the property into repair. So if it is in in disrepair at the start of the lease, you will be responsible for the cost of remedying that. This can come as an unpleasant surprise to tenants, who have not factored in this additional cost when costing their move to new premises.
So, what should you do?
The dilapidations schedule can come as a shock. However, it is often a starting point in a negotiation and there may be other provisions in your lease which limit your exposure. Good legal and dilapidations expertise can reduce the costs you eventually pay.
If you have any questions or want to discuss your situation please contact us on 0800 533 5349.