"Full repairing and insuring" lease - what does it mean?

[lou]

Hi, grateful for some help, I am about to start looking for commercial properties to rent but wonder if someone could please either tell me what a "full repairing and insuring lease" is, point me in the direction of a useful website, or let me have a copy of such a lease!! The majority of properties are let this way but I am having trouble finding somewhere/someone that can explain in laymans terms what my obligations as a tenant will be.

I have several residential properties that I let out and had no problem finding information on the net but there's not as much for commercial property.

Many thanks in advance for your help.

[Tax Accountant]

Your obligations as a tenant will be quite extensive. You will be responsible for all the ongoing repairs and insurance for the building. Although you don't have any responsibility for improving the property, you still have to maintain it in a satisfactory state. The most important is the dilapidations issue. When you hand back the property, you will be responsible for putting back the property in the state in awhich it was originally when the lease was first issued. If you are taking a lease by assignment from another tenant, you are still responsible for all outstanding repairs. It is best to have the property surveyed before you take on a lease.

Ramnik

[SteveP]

It means exactly what it says on the tin. You will be responsible for the insurance and repair of the property. The detail of that repairing obligation will depend firstly on what the repairing clauses in the lease say. Typically they may require you to put and keep, or keep the property in good repair, both terms will make you liable to remedy disrepair that exists already not merely to return it in its present condition.

Repairing clauses also generally include other matters, such as complying with regulations, which you will have to pay for. There are also normally decorating clauses which may have cost implications.

You should not sign a lease without having a survey carried out by a chartered building surveyor (it really is just about the most reckless thing you can do) and if the building has significant mechanical/electrical services you will probably need a report from a chartered buillding services engineer too. A chartered building surveyor will be able to advise you whether the terms are appropriate and whether you should negotiate different terms, for example terms that limit your liability by incorporating a schedule of condition.

I could tell you hundreds of stories of people taking on commercial leases without such advice beforehand that end with the tenant being liable for thousands of pounds worth of disrepair which could have been avoided very easily.

[Tax Accountant]

Do not take commercial leases lightly. Take full legal advice and don't skimp on the survey to ensure that you are not taking on the responsibilities of other peoples repairs and dilapidations.

Ramnik

[lou]

Many thanks for your replies and advice. We will get full surveys and legal advice etc and ensure the building is in an acceptable state before taking on any lease.

Presumably then the owner has no or little responsibility for the property other than buying it?? If so this seems less troublesome than having a residential portfolio where the landlord is responsible for everything - although I am sure it's not as simple as this!

many thanks again for your help

Lou

By the way I am looking for premises of approx 3000 - 6000 sq ft on the west/northwest side of Edinburgh if anyone happens to know of any! thanks.