In his best-selling song of 2014, ‘Happy’, Pharrell Williams asked us all to clap along if you feel like a room without a roof. This lyric resulted in clapping all over the world.
But, it’s unlikely that any commercial tenant of buildings with full repairing covenants joined in the applause. This is because when taking a fully repairing lease a tenant is accepting the responsibility to repair the building and to put it into good repair even if it is not in good condition at the commencement of the term. This means a tenant has to repair or even possibly replace the roof.
To avoid this responsibility it is common for the repairing covenant to be limited to provide that the tenant is not obliged to put or keep the property in any better state or condition than is evidenced at the date of the lease by a schedule of condition attached to it. A schedule can also provide useful evidence in disputes regarding reinstatement at the end of the term illustrating that an item existed at the commencement of the lease.
But, tenants beware!
A schedule of condition has a shortcoming that is an often overlooked. Just because the tenant is not obliged to repair an item does not mean the landlord is obliged to do so!
This shortcoming was highlighted a couple of years ago during the wet winter when some commercial tenants found that a schedule of condition meant that, although they were not obliged to repair a leaking roof, neither was the landlord. Despite the schedule of condition, the tenant still had to repair the roof for both operational and health and safety reasons to enable the tenant to run its businesses from the property.
To avoid this worst case scenario, the tenant should also consider:
- Using the schedule of condition survey to make the landlord put the property into repair at the outset so as to prevent any dispute after the lease is granted as to who is liable for essential repairs.
- Amending the lease so that, in addition to the schedule of condition, it is the landlord’s responsibility to repair such items as a leaking roof.
So, come on all you commercial tenants with full repairing leases.
And clap along if you feel like a room without a roof that’s subject to a schedule of condition and a landlord’s obligation to keep the property wind and water tight.