Repairing Clauses in Commercial Leases: The Hidden Cost That Can Catch Tenants Out
When businesses take on new premises, most of the focus naturally falls on the headline terms — the rent, the location, and the length of the lease. Whilst these are very important considerations, the repairing clause contained within a lease can have financial implications which go well beyond the annual rent payable.
For that reason, it is important that you seek legal advice as early as possible so that you can fully understand your repairing obligations and put in hand arrangements which will strike a fairer balance between Landlord and Tenant ensuring that the Tenant is only responsible for maintenance and repair which arises during the lease term and avoids the need to contribute towards improvements or remedying pre-existing defects.
What Is a Repairing Clause (and Why Should You Care)?
A repairing clause sets out who is responsible for maintaining the property during the lease term. In many commercial leases, that responsibility sits with the tenant.
At first glance, this might seem straightforward. Keeping the premises tidy and fixing the odd issue is to be expected. However, the wording used in commercial leases can go much further than simple day-to-day upkeep.
In some cases, tenants are required not only to maintain the property, but to put it into good repair — even if parts of it were already worn or damaged when they moved in.
“Full Repairing” Leases – More Than Just Maintenance
Many commercial leases are granted on a “full repairing” basis. This can place a wide obligation on the tenant to keep the property in good condition throughout the term.
This obligation might mean fixing issues that were there before the lease began. For example, if the roof, windows, or internal fixtures were already showing signs of age, a broadly worded repairing clause could mean the tenant becomes responsible for putting them right.
This is why it’s so important to fully understand the extent of the commitment before signing and to discuss the mechanisms that can be put in place to help manage the repairing liability.
Why the Starting Condition Matters
One of the most sensible steps a tenant can take is to consider the condition of the property at the start of the lease.
If a tenant agrees to keep the premises in good repair without any limits, they may be expected to hand it back in better condition than when they took it on. In older buildings especially, this can lead to unexpected costs over time.
Making sure the lease fairly reflects the state of the property at the outset can help avoid disputes later on.
The End of the Lease – Dilapidations
Repairing obligations don’t just matter during the lease — they often come into sharp focus when the term comes to an end.
Landlords will usually inspect the property and may produce a schedule of dilapidations, setting out any repairs they believe the tenant should have carried out. If the property hasn’t been maintained in line with the lease, the tenant may be asked to complete works or make a financial payment instead.
These claims can come as an unwelcome surprise if the obligations weren’t fully understood at the start.
How can we help you?
At Adams Harrison, we have experience in dealing with commercial leases. We are well placed to advise you on the implications of a repairing clause and the steps that you can take to minimise your liability. If you are in the process of negotiating a commercial lease or have concerns about the repairing obligations, contact our commercial property team to discuss your situation.
