Repairing Obligations in Commercial Leases
If left open for interpretation, the wording of commercial property leases can sometimes lead to confusion and disagreement. This is particularly true when it comes to repairing obligations in commercial leases. Ambiguity can be common, and not all people can appreciate what key legal terms mean in regards to the level of responsibility they have. This can be the case for both commercial landlords and their tenants.
As a general rule, most tenants’ repairing obligations in commercial leases will require the tenant to “repair” the property. This means of course that the property must be considered to be in “disrepair” before that obligation kicks in.
As the obligation will also be to “keep in repair” the property, it follows that the tenant is also required to put the property into repair if it is in disrepair at the commencement of the lease. This is of course assuming there is no qualification by reference to a schedule of conditions.
Repairing Obligations in Commercial Leases: In Repair or Good Condition?
As a tenant considering a commercial lease, you should always be wary of additional wording in repairing obligations like “keep in good condition”. Over time, case law has determined that wording of this nature is actually more onerous than a standard “keep in repair” covenant and so much more may be expected of you.
The problem with an obligation to keep premises in “good” condition could apply even where the property is not in disrepair but there is some other inherent or latent defect in the premises. This could be something small which would otherwise not need to be repaired or fixed – or it could be something much bigger.
Building and fire safety requirements
Building and fire safety issues are currently a very hot topic in the commercial property arena. If the lease requires the property to be kept in good condition, it may be arguable that compliance with building and fire safety requirements is necessary for the property to be considered in good condition. If this were the case, then repairing obligations would be substantial. The cost and impact of this type of work could be hugely significant to any business.
As this article shows, the interpretation of repairing obligations in commercial leases can be extremely complex with many grey areas which could cause significant issues further down the line. To avoid this, it is crucial that you seek professional legal advice before committing to any commercial lease. GA Solicitors’ commercial property team has decades of experience in commercial leases, advising both landlords and tenants of commercial premises. We can ensure your obligations are clear and your business and/or assets are protected.
The highly experienced team is ranked in The Legal 500 and can provide effective advice regarding all areas of commercial property law, including repairing obligations in commercial leases. Contact the team by calling 01752 203500 or email me directly via david.stone@GAsolicitors.com.
Read the team’s recent article about what happens when a tenant goes into administration here.
You can also read an article about RAAC (Reinforced Autoclaved Aerated Concrete) implications for commercial leases here.
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