Let’s say you need some temporary storage space for some bulky surplus stock, so you take a six month lease of a large run-down shed in the middle of nowhere. The building is in a poor state, the timber is rotting away and the doors are hanging off their hinges, but crucially the rent is dirt cheap. Problem solved. Six months later you vacate the premises. The next day the landlord hands you a notice asking you to repair the building back to its former glory – total cost, £200,000!
What just happened?!
The problem (from the tenant’s perspective) is the repair covenant under the lease. Typical wording in a lease will require a tenant to ‘keep the premises in a good and substantial state of repair and condition and replace or renew any items which are beyond repair’. This seems fairly innocuous, but it actually imposes a very high standard of repair on the tenant. Effectively, the tenant has agreed to return the premises to the landlord in a ‘substantial state of repair’ even though that’s not the way it was at the start of the lease.
- Accurate and careful drafting can exclude or limit your repairing liability. Equally, sloppy drafting can land you in trouble. Get it right from the outset.
- Prepare a detailed schedule of condition highlighting any items of disrepair and agree with the landlord that you will not have to repair or replace these. This usually prevents arguments later down the line.
By way of comparison
Just think, if you wanted to hire a car and it arrived with a dodgy clutch, dented bodywork and bald tyres, would you nonchalantly take it home and repair it yourself? Of course not; you would categorically and unequivocally point out the problems on day one. So why would you accept this on a building where the potential cost of repair is far greater?
For more information contact Shazan Miah: SMiah@gateleyuk.com