Understanding a repairing obligation

Aug 29
3 min read

Updated: 2 days ago

Introduction

A tenant takes a unit on a full repairing and insuring lease. Three years later the roof, which was already near the end of its life when they moved in, needs replacing. The landlord's position is that this is the tenant's responsibility.

That position is very likely correct. Full repairing obligations transfer the condition of the building to the tenant, including pre-existing deterioration, and the cost can exceed several years of rent. It is the single most expensive clause in most commercial leases and the one tenants understand least. It is also the clause landlords are least likely to volunteer an explanation of.

1. Understanding a repairing obligation means knowing which type you have

Three broad positions.

Full repairing, where you are responsible for the whole premises; internal repairing, where you deal with the inside only; and arrangements where the landlord repairs and recovers the cost through service charge. Which one you have determines everything.

2. Recognise that repair can mean renewal

The point that surprises tenants.

An obligation to keep something in repair can require replacement where repair is no longer practicable. A tenant with a full repairing obligation and an aged roof may be obliged to renew it entirely.

3. Understand that you may have to improve the condition

The counterintuitive part.

An obligation to keep premises in good repair can require putting them into good repair first, even where they were not in that condition when you took them. This is why the starting condition matters so much. A building already in poor order becomes your problem the day you take it.

4. Agree a schedule of condition before you sign

The single most valuable protection.

A photographic and written record of the premises at the outset, annexed to the lease, limiting your obligation to the condition recorded. This is standard, inexpensive, and routinely omitted. It costs a surveyor's half day and can save a figure many times the annual rent.

5. Survey the building before committing

Particularly for older premises.

A building survey identifying the age and condition of the roof, structure, services and windows tells you what you are taking on. For an older building this is the difference between an informed decision and a gamble.

6. Check what is included in the demise

The boundaries of your responsibility.

Whether the structure, roof, foundations, windows, external walls and service installations are within what you have leased. Tenants are frequently responsible for more than they assumed.

7. Ask about service charge if the landlord repairs

The cost arrives either way.

Where a landlord maintains a building and recovers it through service charge, you are still paying, and possibly for major works. Ask about planned expenditure and whether the service charge is capped.

8. Budget for it as an ongoing cost

Not an occasional surprise.

A full repairing obligation on an older building is a real annual cost that should sit in the forecast. Businesses that treat it as an unexpected event are repeatedly surprised by something entirely predictable.

9. Remember it applies at the end as well

The dilapidations claim.

At lease end the landlord assesses the condition against your obligations, and the resulting claim can be substantial. Everything about the repairing clause determines what that bill looks like years later.

Negotiate the obligation itself rather than accepting the draft. Limiting it to internal repair, excluding specific elements, capping liability, or agreeing that you need not improve on the recorded condition are all achievable, and landlords expect the conversation.

Conclusion

Establish exactly which type of obligation you have, because the difference is enormous.

Understand that repair can require renewal and can require improving the condition first, agree a photographic schedule of condition annexed to the lease, survey older buildings before committing, check precisely which parts of the building are within your demise, ask about planned works and service charge caps where the landlord repairs, budget for it as an ongoing annual cost, remember it determines the dilapidations claim at lease end, and negotiate the clause itself rather than accepting the draft.