Throughout the course of our work of dealing with commercial properties, we work with a wide spectrum of clients. Some are new commercial clients that have come to us by recommendation and others are repeat clients that we have built up a relationship with over the years, helping and advising on numerous property transactions including purchases and lettings.
Regardless of our existing relationship, when a business tenant is taking up a new lease, we would almost always advise commercial clients to have a Schedule of Condition prepared. However, the decision is entirely that of the clients and not all take up the advice.
One factor that really comes into play when deciding whether or not to have a Schedule of Condition undertaken is if the client has faced a dilapidations claim against them in the past. Virtually without fail, all tenants that have been at the receiving end of a dilapidations claim will choose to have a Schedule of Condition prepared when the time next comes for them to take up a new commercial lease. It really is a case of once bitten, twice shy! Being faced with a dilapidations claim of thousands or even tens of thousands of pounds could act as the fatal blow for many businesses. Even if a client has been able to successfully defend or mitigate their dilapidations liability of a past claim with the help of a Chartered Surveyor, the stress of the claim and fighting it is certainly something that clients would rather avoid in the future.
A Schedule of Condition is thankfully a fairly straightforward way to protect a business that is taking up a commercial lease. It is a professionally prepared document that includes both detailed written descriptions and extensive photographs to give a clear record of the condition of a building when a Tenant takes possession. A Schedule of Condition identifies any pre-existing disrepair present in the property, providing a Tenant with evidence that the damage, disrepair and deterioration already existed before they took occupancy.
Without this evidence, it can be very difficult to prove one way or the other what condition the property was in when the tenant took possession. Therefore, when it comes to the end of the lease, a landlord can, and often does, prepare a Schedule of Dilapidations and a tenant will subsequently suffer a dilapidations claim to cover the cost of repairs to the building so it can be leased again to another tenant.
If you are taking up a lease for the first time, or if you have been lucky enough to avoid dilapidations claims at the end of previous tenancies, this blog might hopefully give you the opportunity to learn from the mistakes of others. And if you have faced a dilapidations claim in the past, you will probably never want to fall into that trap again! Next time you will probably ask for the most detailed Schedule of Condition possible!