A Schedule of Condition records the condition of a building or other property, normally for legal or contractual reasons.
Lease Repairing Covenants
When commercial or residential property is let the lease or tenancy agreement sets out the responsibilities of the lessor and the lessee. The lease clauses commonly set out which party will be responsible for repairs. Leases may be fully repairing and insuring when the lessee takes on the responsibility for all repairs and insuring the building. This includes structural, internal and external repairs.
There are commonly separate clauses relating to redecoration at specified intervals which may vary. External decorations are commonly carried out every 3 years and internal decorations every 7 years.
When taking a fully repairing and insuring lease the lessee is accepting the responsibility to repair the building and to put it into good repair even if it is not in good condition on commencement of the term.
Similar covenants often apply where a lessee has taken part of a building only. In those circumstances the lease often provides for the tenant to carry out internal repairs and pay a proportion of the cost of external and structural repairs and maintenance.
Fully repairing and insuring leases are based upon what is required by freeholders to ensure that the property remains a good investment with rental income and no responsibility for outgoings. This type of arrangement works well when a tenant takes a new building, or a modern one in good condition, over a lengthy lease term.
Alternative Repairing Covenants
Modern practice is to move towards short leases, often with break clauses for secondary and tertiary property. Many lessees believe that it is unjust for them to be responsible for repairs to what may be an old, poorly maintained building which has been neglected for decades when they have only taken a short term lease.
Similarly, prospective lessees wish to avoid responsibility for carrying out major repairs to a building when they have taken a lease of a small part of that building. An example would be a small office suite within a large building which requires the roof to be replaced in the short term.
It is now common for lessors and lessees to agree repairing covenants which are not fully repairing and insuring. These terms are sometimes on the basis that the lessee is responsible for keeping the building in no better condition than exists at the commencement of the lease. It is necessary to record the condition of the property at the commencement of the lease in order to ascertain whether or not the lessee has complied with its responsibilities.
From the lessor's point of view a Schedule of Condition is useful to ensure that a lessee has complied with the lease covenants. From the lessee's point of view a Schedule of Condition is necessary to ensure that the lessor does not insist on the lessee bringing the property up to a higher standard than initially existed.
Building works close to neighbouring property
When carrying out building works under the Party Wall etc Act 1996 it is necessary to take a Schedule of Condition of adjoining buildings prior to commencement of works. The party wall surveyors are able then to re-inspect the property on completion of the works and ascertain whether or not any damage was done, and also direct what repairs should be carried out.
Access to Neighbouring Land Act
Property owners have rights of access to their neighbour's land where it is necessary to carry out repairs and maintenance which cannot be dealt with from their own land. It is necessary for surveyors to prepare a Schedule of Condition of the neighbouring property and adjacent land so that any damage done during the course of repairs and maintenance may be ascertained and directions given as to repairs required.
Form of Schedule
Schedules of Condition are prepared in columns giving information as to the area of the property, the element of structure, the condition and defects. In many cases the Schedule is extensive, covering many minor items of disrepair and defects. Surveyors include a series of photographs taken at the time of their inspection as further evidence of condition.
It is important that a lease or tenancy agreement refers to the Schedule and that the repairing covenants control or restrict responsibilities for repair.
Lessors often serve lengthy Schedules of Dilapidations on lessees to enforce compliance with the repairing covenants of the lease or to obtain a monetary settlement. A Schedule of Condition combined with a well drafted lease may be used in the tenant's defence or as evidence supporting the lessor's notice and Schedule.
We provide Schedules of Condition with photographs in many circumstances.
Principal Surveying & Project Services Ltd. Registered Office: Suites 2 & 3, Bow Street Chambers, ½ Bow Street, Rugeley, Staffordshire, WS15 2BT. Registered in England & Wales No: 07701399