Schedules of Condition
A Schedule of Condition records the condition of a building on a specific date and the scope and extent of the document may vary according to its intended purpose – for example, a document intended to limit a tenant’s repairing obligations is likely to be much more detailed, than a condition schedule to record a property prior to construction works.
Where schedules are prepared to limit tenant’s obligations it is essential to have a good understanding of the Landlord & Tenant legislation generally and the specific intentions of the parties in each case.
Leases may be fully repairing and insuring where the lessee (tenant) takes on the responsibility for all repairs and insuring the building. This includes structural, internal and external repairs. When taking a FRI lease the tenant is accepting the responsibility to repair the building and often to put it into good repair even if it is not in good condition on commencement of the term. FRI leases are preferred by the freeholder owner as it helps to ensure that the property remains a good investment with rental income and no responsibility for outgoings.
Where properties are let on a short lease, tenants can often consider it unacceptable to be responsible for repairs to what may be an old or poorly maintained building. Modern leases can now include alternative terms where the lessee is responsible for keeping the building in no better condition than exists at the commencement of the lease.
For the freeholder owner, a Schedule of Condition is useful to ensure that a lessee has complied with the lease covenants.
For the tenant, a Schedule of Condition is necessary to ensure that the lessor does not insist on the tenant bringing the property up to a higher standard than initially existed.