commercial tenant Archives

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

Posted on July 4, 2023 by admin

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 (often referred to as interim 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 aim of 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 somewhat 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. This schedule of condition is often 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. Similar to 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 schedule of dilapidations process – from carrying out inspections and estimating costs, to issuing paperwork and giving trusted advice.

Why use a building surveyor at the start and end of your commercial lease?

Posted on June 20, 2023 by admin

A commercial building survey is not just for properties being sold. In fact, there are many reasons why you might appoint a surveyor to carry out a building survey or inspection on a rented commercial property.

Assessing the condition of the property

All commercial leases have clauses regarding the condition of the property, and how it should be maintained. This wording is designed to protect both landlords and tenants. But when it comes to enforcing these clauses, or ensuring a commercial property is being properly maintained, professional help is often needed.

This is where a trusted commercial building surveyor is worth their weight in gold. They can carry out building surveys and other inspections, and provide detailed reports (including photos) on the condition of the property and any maintenance issues. With this in mind, having a building survey done at both the start and end of any lease is a good way to reduce risk and ensure peace of mind.

As well as a formal commercial building survey, surveyors can also help with:

Schedule of Dilapidations – when a tenant has failed to properly maintain the property, this report outlines the items of disrepair and specifies the work needed to bring the property up to scratch.
Photographic Schedule of Condition – this document sets out the condition of the property in forensic detail, and covers the repair and maintenance obligations for the length of the lease, as agreed between the landlord and tenant.
Rent reviews – setting out the property’s current rental value, this report can be used to support lease negotiations and ensure the rent is set at the proper market rate.

Benefitting commercial landlords and tenants alike

Many commercial tenants choose to have a property survey done before they take on a new lease because it can save them a lot of money in unexpected repairs. And for landlords, surveys and inspections are a vital way to protect their investment.

Ultimately, working with a professional commercial property surveyor means both sides can be sure the advice given is accurate and fair – which helps to promote positive communications and deepen trust between the landlord and tenant.

At Perry Hill Chartered Surveyors, we support both landlords and tenants with the full range of surveys, inspections and valuations. Discover how we can help you get the most out of your commercial lease agreement.

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

Posted on May 7, 2023 by admin

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 this condition 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. Click here to discover how our forensic approach to detail can help protect your interests.