Archive for June, 2011

Why a surveyor should appraise your draft lease

Wednesday, June 1st, 2011

A property lawyer challenged me recently to explain how a surveyor could add to his legal advice for a tenant taking a new lease.

 I explained that it’s not until you try to apply some of the clauses to practical situations that you realise just how unreasonable, unworkable and inadequate some lease are.  It’s the experience of using them that a surveyor can bring to the pre-lease negotiations.

All too often leases are drafted and negotiated between lawyers with little regard for the intentions of the parties.  And inexperienced tenants expect their lawyer (if they have one) to protect them and the lease to include the promises made by the letting agent when he was closing the deal.

But all too frequently historic precedent documents or ‘standard leases’ are regurgitated regardless of the nature, age, location and condition of the building or the lease term.  I believe it’s not enough to insert the ‘agreed’ Heads of Terms and leave it at that.  They need to be put in context of both parties’ intentions, the whole lease and the particular building.

Dilapidation claims relate mainly to: Standard of repair, cleaning and redecoration, reinstatement of alterations, landlord’s fixtures and fittings and loss of rent.

I’ve seen covenants fit for a property in Mayfair applied to a run-down tin shed

Repairing covenants vary greatly.  I’ve seen covenants fit for a property in Mayfair applied to a run-down tin shed on an industrial estate.

I’ve heard it said “The rent is low to reflect its condition” and then torrentially worded repairing clauses applied far exceeding the reasonable intentions of the parties.

A short lease on a nearly new office building required the Tenant to clean all the brickwork and concrete at the end of the term.  How can that be reasonable? How often are building facades normally cleaned?  What would be the loss if it wasn’t?  A specific requirement to remove any graffiti, paint, oil or grease, or such like would have been more appropriate.

On the other hand cladding manufacturers specify cleaning and repainting regimes for maintenance of their cladding.  This should be covered specifically, but never is.

Decoration clauses are frequently inappropriate.  I’ve yet to see the wallpaper, graining and French polishing referred-to in the lease for an engineering workshop.

I’m not just suggesting ways to protect the tenant.

How can the Landlord’s surveyor know whether the Tenant has made alterations or removed Fixtures and Fittings without a record attached to the lease.

And why would a landlord want to relieve his tenant from the obligation to redecorate internally at the end of his lease because he’s done it in 12 months previously?  The Landlord is going to expect the place clean and freshly painted.

An experienced surveyor understands the financial implications to both parties of these ‘throw-away’ clauses included in leases and can bring some common sense to the drafting