What is a Photographic Schedule of Condition report? (And how can it benefit landlords and tenants?)

Last month, we explored what happens when a tenant fails to repair or maintain a building, and how a Schedule of Dilapidations can help to document and address maintenance issues.

Yet, there’s another report that can serve to avoid unexpected maintenance issues and disputes altogether: the Schedule of Condition. Let’s look at what a typical Schedule of Condition covers – and see how it benefits both parties in a commercial lease.

A forensic breakdown of the property’s condition

The Schedule of Condition provides a factual record (including detailed photographs) of the condition of a property. Essentially, it supports the lease by acting as a contractual agreement between the landlord and tenant on the condition of the property, and the repair/maintenance duties for the duration of the lease.

The Schedule of Condition is therefore used at the start of a new lease, and is designed to protect both parties against future disputes – particularly at the end of the lease.

If a landlord or tenant attempts to prepare their own Schedule of Condition without taking professional advice, it’s unlikely to be detailed enough to provide any real protection. That’s why the report should always be prepared by a chartered surveyor.

Protecting landlords and tenants

Any commercial lease will have a section covering the tenant’s obligations to repair and maintain the property. Without a detailed Schedule of Condition, the extent of those obligations can be open to interpretation – potentially leading to disagreements further down the line.

Because the Schedule of Condition provides contractual certainty on the state of the property and maintenance requirements, it reduces the risk of unpleasant (and potentially expensive) surprises for either party. What’s more, at the end of the lease, it eliminates the need to spend time and money negotiating any claim for dilapidations.

This peace of mind is priceless for both landlords and tenants. For the landlord, the Schedule of Condition reduces their liability and clarifies their expectations. And for the tenant, they know up front exactly what their maintenance obligations will be.

Get expert help

We at Perry Hill Chartered Surveyors believe the Schedule of Condition is a vital prerequisite when leasing premises, and our team has many years’ experience preparing these reports for both landlords and tenants. Discover how our forensic approach to detail can help protect your interests.

What is the difference between an Interim Schedule of Dilapidations, Terminal Schedule of Dilapidations and Final Schedule of Dilapidations?

If a tenant mistreats a property or fails to maintain it according to the terms of their lease, the landlord can issue a Schedule of Dilapidations. This process provides a much-needed failsafe for landlords, helping to protect their investment and clarify a fair, appropriate way forward. And for tenants, it helps to avoid nasty surprises – like being presented with a huge repair bill at the end of the tenancy.

What are the different types of Schedule of Dilapidations?

There are, in fact, three different Schedules of Dilapidations: Interim Schedule of Dilapidations, Terminal Schedule of Dilapidations and Final Schedule of Dilapidations. Broadly speaking, they all fulfil the same goal of setting out the tenant’s obligations to bring the property back up to scratch. The difference is they’re used at different points in the lease period.

Let’s take a look at the three options and see how they’re used:

Interim Schedule of Dilapidations

This first option is issued during the course of the lease, for example, if a landlord is concerned that proper maintenance isn’t being carried out. The idea behind the Interim Schedule is to remind the tenant of their obligations and clarify what’s expected – thereby helping to nip any neglect in the bud and protect the value of the property, while also protecting the tenant from higher repair costs further down the line.

Terminal Schedule of Dilapidations

The rather more ominous sounding Terminal Schedule is used towards the end of the lease, usually within the last 18 months to three years of the lease. It tends to be more detailed than the Interim Schedule, listing items of disrepair that need to be fixed before the end of the tenancy.

Final Schedule of Dilapidations

The Final Schedule is issued after the lease has expired, in the event that required repairs haven’t been carried out. Just like the Terminal Schedule, this one will generally set out in detail what works are needed, but, as the lease has already expired by this point, the Final Schedule may also include the cost of lost rent while the repairs are being carried out.

Professional Support from Leading Chartered Surveyors

Managing dilapidations while maintaining a good tenant–landlord relationship can be especially tricky, so professional support is a must. Perry Hill’s team of chartered surveyors guides both landlords and tenants through the dilapidations process – from carrying out inspections and estimating costs, to issuing paperwork and giving trusted advice.

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