Schedule of Condition
Our team of experienced chartered commercial surveyors are experienced in supporting tenants with schedules of condition on all types of commercial space, from offices and high street retail premises to large industrial units and modern shopping malls.
Our expert schedule of condition reports provide a detailed and accurate record of the condition of a property at a particular point in time.
What is a schedule of condition?
A schedule of condition is a report that is produced by a surveyor to define the state of repair of each element of a property at the start of a lease. They are used to negotiate the terms of the lease before it is signed, and to defend against dilapidations claims when the lease term comes to an end.
Do I need a schedule of condition?
Schedules of Condition for leased properties
We strongly recommend that a schedule of condition survey is carried out before entering into any commercial lease. It will provide a snapshot of the property condition, including any defects present, at the start of the lease. This can be used in evidence when a dilapidations is served by a landlord at the end of the lease. In this way, the reports frequently prevent tenants becoming liable at the end of the lease for repairs and rectifications that they are not responsible for.
Schedules of condition reports are particularly important for tenants who will be required to return the property to its exact original state at the end of the lease term.
A typical repairing covenant requires the tenant to maintain the building fabric and finishes throughout the term. This could include the building structure, roof, external walls and load bearing elements and / or the internal finishes, floor coverings, windows, doors and ceilings. In addition to the repairing covenant, the tenant will have further obligations relating to statutory compliance, decoration and alterations. Without detailed evidence on the condition of the property at the start of the lease term, each covenant can apply a significant liability on the tenant.
To limit a tenants liability at the end and during the lease term, a photographic schedule of condition should be prepared to clearly show the condition of the property at the start of the lease term. This ensures that if a building element is leased in disrepair, there should be no requirement for the tenant to put the element in repair at the end of the lease term.
Schedule of Condition: Party wall and other building works
Schedules of condition are also often conducted before building works, start close to the property in question. Party wall works are a good example of this. In such cases, the party wall schedule of condition report is used to determine whether the neighbouring building works have had any adverse effect on the property.
What does a schedule of condition involve?
The surveyor will ensure that every relevant aspect of the property is documented through photographs, videos and text. A chartered commercial surveyor should have experience not only of schedules of condition, but also of dilapidations and full building surveys. This means that they are experts in identifying defects, key indicators of property condition and any other aspects that are likely to be disputed by the end of a lease or following party wall or other building works.
The reports contain photos and video content, along with explanatory text descriptions to complement the images and add detail. Photographic schedule of condition reports are set up with the text accompanying each photo, so the observations are completely clear to anyone reading the report.
Our schedule of condition reports illustrate defects and items of disrepair evident externally and internally to the structure, fabric and services of the property at the date of inspection. The current condition and any defects are illustrated using photos accompanied by explanatory text giving indications of the severity of the defects. The reports also includes a description of the extent of the property and the land it’s on, its construction, and its location. Definitions of terms used are also provided.
How a schedule of condition is used when dilapidations are served
Either during or at the end of the lease a landlord will serve a schedule of dilapidations. This schedule will list out the breaches that the landlord believes have been made, and will describe how the breaches can be remedies, along with costs for the remedial works (costs are provided in terminal schedules only).
We have acted for numerous clients – both large and small – who have felt very much aggrieved that they were being asked to repair or remedy a defect which they recall having been an issue before they even signed the lease.
The preparation of a schedule of condition (and its annexation to the lease) provides protection from the scenario described above. When there is an item or element in disrepair at the start of the term, this is evidenced within the schedule. When a schedule of dilapidations is served upon the tenant, the schedule of condition can be referred back to, either during or at the end of the term, to ensure that the landlord is not requesting remedy of an item in disrepair that was clearly in disrepair at the start of the term.
It is our experience that the protection provided by a schedule of condition ensures that tenants are not made liable for potentially very costly items of disrepair at the end of the term. Your solicitor will ordinarily recommend that a schedule is prepared as part of the initial lease agreement process.
Want to know more?
Schedule of Condition: Case Studies
Industrial Unit near Manchester
Brief: Carry out a schedule of condition, with a specific inspection of the roof.
Property: Small end-of-terrace commercial unit with first-floor office accommodation.
Instructed by: A tenant taking on a new lease.
Adjoining Warehouse Units
Brief: Photographic schedule of condition report for a tenant leasing two adjoining units on an industrial park.
Property: Warehouse units of circa 6800 square feet, near Liverpool.
Instructed by: Large energy company.
Brief: Schedule of condition survey on a small unit on an industrial estate in Warwickshire.
Property: Single storey small industrial unit.
Instructed by: The prospective tenant.
Brief: Photographic schedule of condition of 3 substantial warehouse units.
Property: Three warehouse units in a terrace with a total area of over 18,000 sq feet.
Instructed by: The tenant – a commercial property manager from an engineering company.
Allcott Commercial’s condition reports
The Allcott Commercial team appreciate the unique nature of each property and lease. Subsequently, we understand the need to record schedules accurately, and to work within often challenging time frames to deliver the information in a variety of forms including:
- ingoing schedule of condition with photographs
- existing schedule of condition with photographs
- film/ DVD schedule of condition
Our surveyors understand lease obligations and are happy to review draft leases and advise tenants and their solicitors on key points to consider before signing on the dotted line.
Looking for residential / home survey services?
Looking for a RICS Level 2 or Level 3 Building Survey or Specific Defect Survey for a privately-owned residential property? Our team of residential surveyors and engineers can help. Visit allcottassociates.co.uk or Get an Instant Quote.
Alternatively, Allcott Commercial provides surveying services for housing associations and other residential property owners.