Repair obligations in a commercial lease

A commercial repair covenant can create significant liability for defects the tenant did not cause. The starting point is the actual obligation and the area it covers, read with the building's condition and any negotiated limitation. ^[1]

Map responsibility onto the building

Identify the roof, structure, windows, services and common parts. Ask which items the tenant repairs directly and which the landlord repairs through a service charge. A unit described as 'internal only' should be checked against the precise definition and schedules.

Commission appropriate condition advice before accepting an obligation whose cost is unknown. Existing water damage, obsolete plant or damaged flooring should be described rather than dismissed as normal wear.

Connect condition limits to the covenant

If a schedule of condition is negotiated, ask how the lease uses it to limit liability. Photographs attached without operative wording may not produce the intended protection. Check decoration, replacement and reinstatement obligations separately.

Preparing the condition schedule creates the evidence. Terminal dilapidations concerns the later claim if obligations remain unmet. Budget for foreseeable works throughout occupation, avoiding a business plan that treats repair exposure as a problem only for the final month.

Read the premises definition before the repair clause Identify the physical elements included in the tenant's demise. A lease of one floor may include windows, internal services and particular surfaces while excluding the main structure. A whole-building lease can create a much broader maintenance exposure. Ask the solicitor and surveyor to relate the definition to the actual building rather than rely on a shorthand label used during negotiations. Government guidance directs tenants to the lease for repair and maintenance responsibilities. [1] The important question is what this tenant has agreed to keep in the specified condition.

Where the landlord repairs shared or structural elements, examine how the tenant contributes through other provisions. Excluding the roof from a direct repair covenant may still leave a service charge contribution towards roof works. Conversely, an item within the unit may belong to a separate system maintained by the landlord or a supplier. Trace both the duty to arrange work and the duty to pay. This avoids treating a division of physical responsibility as though it necessarily removes the corresponding financial exposure from the tenant's budget. ## Investigate existing defects before accepting the obligation Commission an appropriate inspection with the proposed repairing terms available to the surveyor. A report focused only on general suitability may not identify the cost implications of accepting a particular covenant. Draw attention to water ingress, ageing plant, damaged finishes and areas that could not be inspected. Ask which findings need further investigation and what uncertainty remains. The business needs to understand the condition it is taking on before deciding whether the rent, term and negotiated limitations justify the potential work involved.

If the landlord promises to complete repairs before the letting, identify the specification, timing and evidence of completion. Ask how the lease or agreement for lease deals with work that is incomplete or proves inadequate. A verbal assurance that the roof will be sorted does not tell the tenant what standard was promised or what happens if the leak returns. Where the tenant is expected to do the work instead, make sure the commercial concession and the legal obligation reflect the same scope rather than two different understandings of the problem. ## Check obligations that can bypass a narrow repair discussion Read decoration, replacement, statutory compliance and reinstatement provisions alongside repair. A limitation tied to the initial condition may apply to one covenant while another requires separate work at defined intervals or on departure. Ask the solicitor to explain each material obligation and any interaction with alterations licences. A tenant can understand the repair clause correctly yet underestimate the total exposure if the review overlooks replacement of equipment, removal of installations or a separate requirement concerning the standard in which the premises must be returned.

Where a schedule of condition is proposed, confirm which obligations it limits and how the lease uses it. Have the surveyor check that the evidence covers the relevant parts of the premises and makes the recorded defects identifiable. A collection of photographs should not be assumed to cap liability unless the contractual wording gives it that effect. If a defect worsens during occupation, ask how the covenant and limitation would be assessed. The distinction between recording an initial defect and agreeing responsibility for later deterioration needs to be understood. ## Plan maintenance around the lease's practical demands Create a maintenance plan based on the building and the obligations accepted. Identify inspections, servicing and work that can be scheduled without disrupting essential trading. Preserve records of repairs, contractor advice and notifications to the landlord. Where access to another area is needed, establish the relevant arrangements early. A business that waits until a system fails may face both operational disruption and a difficult discussion about whether it met the required maintenance standard, particularly if records of earlier warnings or servicing are unavailable.

Review the likely end-of-term position well before departure. Obtain advice on outstanding repairs and the separate requirements for decoration or reinstatement, including any notice provisions. The landlord's later claim is not necessarily established by every figure appearing in a schedule, but the tenant should understand its obligations while it still has time to consider work. Keep the original condition record and subsequent maintenance history together. They allow advisers to assess the change in condition and the contractual questions using evidence from throughout occupation rather than photographs taken only after the business has left.