By Chris Noble, Director of Professional Services & Registered Valuer
Many people believe Schedule of Condition reports are more important for tenants when leasing properties than they are for landlords, but that is certainly not always the case.
They are of equal importance to all involved in the leasing of a commercial property, as they are defining documents used to set out the exact condition of the premises at the start of the agreement between two parties.
In more than 25 years working in the commercial property market, our team of chartered surveyors at Garness Jones have produced hundreds of Schedule of Condition reports, at the request of both landlords when leasing properties and tenants moving into new premises.
We have seen situations where this particular document has helped landlords to save large amounts of money at the end of a lease, particularly when their property has not been maintained to the standard it was when the tenancy started, or set out within the terms of the lease.
In these circumstances, where a landlord faces significant cost to bring the property back to the standard at the beginning of the lease, they can use the Schedule of Condition report to support the issue a Schedule of Dilapidation order, which sets the requirements of the tenant to fund the cost of remedial works required.
Equally, for tenants, this is a document which can prevent them from being unfairly served with a claim to repair damages at a point later in their lease.
For a tenant, it is essential that the Schedule of Condition accurately records the condition and upkeep of all aspects of the property at the beginning of the lease – protecting them for being blamed for something that has not been their fault.
This document also often proves influential when a landlord and tenant negotiate the terms of the lease, based on what the report says about the property condition.
Decades of experience in Schedule of Condition reports
At Garness Jones, our team of chartered commercial surveyors have decades of combined experience of producing Schedules of Condition on all kinds of commercial properties, from major industrial units (both new and old), to retail spaces and office complexes.
We always urge parties to agree to a schedule of condition report on each and every commercial property lease deal we are involved in, as they are defining documentation of the state of repair of a property at the start of a lease.
The report should set out clearly, in fine detail, the exact condition of the property at the time the tenancy begins, establishing the expected condition of the property at the end of the lease term. The report should be referenced in the legal agreement which forms the property lease.
What should a Schedule of Condition report include?
There is no specific rule as to what should be included, but put simply, it should detail the condition of every relevant aspect of a property which is being leased out.
At Garness Jones, we believe the more specific and detailed the report, the better. The key is to ensure a report is provided and signed which accurately documents all aspects of the property.
This means that it should detail aspects of the property condition that are not perfect at the beginning of the lease, and always include lots of photographs and detailed text descriptions.
Where required, our team will also include videos and drone footage, which can record conditions of roofs, and areas surrounding the building.
We also usually include floor plan layouts which show the arrangement of the premises at the time the lease is agreed, as many leases will have conditions stipulating that a property must not be altered in any way by the tenant without consent of the landlord. Details of any tests (such as for damp testing), can also be included.
Need a Schedule of Condition report? Contact our team today on 01482 564564
