COMMERCIAL TENANTS
A Schedule of Condition is absolutely essential for a commercial tenant. It is commissioned before the signing of a lease in order to determine the condition of the premises so that any pre-existing defects and potentially their repair costs are identified prior to commitment. The aim is to limit your liabilities to future deterioration only.
Failure to commission a Schedule of Condition is commercial suicide. It will either end you up in Court, or with potentially massive and unnecessary outlay, or in liquidation. We have heard Tenants say many times that the property was in a dreadful condition at commencement and that they actually improved it and yet they still had a Schedule of Dilapidations served upon them!
Providing independent, forensic level high definition film as corroboration for the Schedule of condition is not only legally robust, but will ensure that the Landlord and his advisors will have to include the Tenant's evidence in the contractual documentation. Even if they still refuse to agree the Tenant's Schedule of Condition, then there is a dated, absolute, objective and complete base line of condition that could save the Tenant thousands of pounds at the end of the term.
Our reports not only provide the highest calibre of evidence, but also a report on potential future defects that might need attention. This can also help you with preparation of a Planned Maintenance Programme.
Furthermore, the Schedule of Condition can be used to negotiate with your future landlord to force the repair of existing defects, thus saving you considerable sums of money (you will probably be inheriting the repair liabilities from the outgoing tenant.)
When the Landlord serves the Dilapidations Schedule on you, either during or at the end of the term, you will need a dilapidation survey in order to counter any claims made by him. The Schedule of Condition will provide you with extremely powerful evidence of condition and disrepair at the commencement of your term, thus preventing any exaggeration of dilapidations by the Landlord or his surveyor.
We know of a case where a fairly substantial industrial unit was vacated by a manufacturer at the end of a 15 year lease in 2007 and the landlord had a dilapidation survey prepared. When initially signing the lease 15 years earlier, the tenant economized by having a bare bones and evidentially pointless "schedule of condition" carried out, consisting of a few general photographs of the building and almost no commentary.
At the end of the lease, the landlord was able to submit a successful dilapidation claim for over £300,000, because the Tenant's "schedule of condition" was of no forensic value. A small investment at the start of the lease could potentially have saved the Tenant around 50% of the Landlord's claim. A planned maintenance programme to ensure compliance with the terms of the lease would have saved considerably more.
There are many ways to save money when leasing commercial property, but scrimping on a Schedule of Condition must not be one of them.
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