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FEATURE


MADE IN THE EAST MIDLANDS


of a “put and keep” obligation can be to require a tenant to improve the premises. Therefore, faced with this potential onerous liability to improve the premises, the tenant may negotiate a less onerous repairing covenant (referring to the Schedule of Condition), which would then exclude any obligation to improve the premises. Such proviso to the repairing covenant could potentially


read as follows: “…providing that the tenant is not obliged to put or keep the premises in any better state or condition than at the date of this lease, as evidenced by the Schedule of Condition”.


WHEN IS A SCHEDULE OF CONDITION ESSENTIAL? We would recommend that where the tenant is proposing to take a lease of a property in poor condition or where the repairing covenant is onerous, serious consideration should be given to limiting the repairing liability by reference to a Schedule of Condition to ensure the tenant is not liable to remedy repairs caused by a previous tenant.


CASE STUDY: GRILL SHACK


A Schedule of Condition acts as written or photographic evidence of the state of the property at the time the lease is granted. It will consist of a list of photographs and additional description of the property and is appended to the signed lease.


OUR APPROACH We were commissioned by Grill Shack to undertake a survey and prepare a Schedule of Condition at the pre-lease stage on a takeaway restaurant for the ingoing tenant, Grill Shack. An on-site inspection was carried out and a record of the condition of the proposed leased areas, along with photographs, were taken and compiled into a report, which is intended to be appended to the proposed signed lease.


CLIENT BENEFITS • We identified a number of defects and advised these would be a liability during the lease term


• Having flagged up these issues, the tenant was able to negotiate and ensure the repairs became the landlord’s responsibility – removing this liability


• The Schedule of Condition helped to decide whether to go ahead with the lease and influence negotiations regarding price


• Listed liabilities, which needed to be factored into the client’s negotiation • The report enabled the client to make an informed decision about the proposed premises and its investment potential.


68 business network December 2020/January 2021


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