Business tenants often comment they have been caught out by unforeseen property repair costs when they vacated previous premises. It is essential tenants fully understand repair and maintenance obligations, to avoid unexpected dilapidations claims at lease end.
Repairing obligations should be clearly defined in your lease, although be sure to read carefully as obligations vary between different landlords and properties. It is essential you understand the obligations you sign up to as tenant.
Repair clauses in commercial leases might expect a tenant to keep a property in good condition, or may be limited to reflect the condition of the property at lease commencement. However, the lease might also require the tenant to “put” the property in good repair. The important thing is that lease obligations upon each party should be clear and comprehensive, reflecting exactly what both parties think they’ve agreed. If lease obligations seem vague or ambiguous when agreeing a new lease, insist upon re-drafting the lease terms to reflect exactly what is being agreed between the parties.
Tenants who defer repairing obligations until lease end risk costly surprises. At lease expiry, a tenant will usually be required to return the property in the condition envisaged under the terms of the lease. This can often result in unexpected costs as tenants set about putting right a backlog of neglected maintenance work.
Failure to complete those works before lease expiry can result in a claim against the tenant for the cost of unfinished works. The claim might also include damages for lost rental and fees incurred for the period during which the Landlord undertook unfinished works. A property’s poor state of repair and maintenance can also be used as reason to invalidate a tenant’s break notice, or to justify refusal of Landlord’s consent should a tenant apply to assign its lease, sublet the premises or seek consent to make alterations.
Accordingly, Sterling Industrial recommends tenants adopt planned and regular maintenance programs. Whilst of course ensuring your business operates from well presented premises, a strategic approach to property maintenance with properly budgeted and tendered projects, will also help reduce repair costs. Regular inspections identify minor problems at early stages and before they escalate into expensive repairs, whilst planning ahead also reduces the risk of having to carry out emergency works in the face of impending date deadlines.
Health and safety should always be prioritised when employing building maintenance contractors, so we recommend identifying accredited contractors through portals like SafeContractor to increase the likelihood of quality workmanship and safe working practises.
Sterling Industrial has a dedicated team of asset managers available to offer support to its tenants where required. Contact us to find out about Sterling Industrial’s clearly written tenancy documents or if you are considering taking new commercial premises.