A Schedule of Conditions is considered to be a useful tool in providing protection for the instructing party. However, if you’re not sure who should get a schedule of condition survey, then read our blog.
Prior to entering into a legally binding contract (such as a lease) it is important to understand the construction form of the building fabric so that you can then understand the likely maintenance regime necessary in order to prevent disrepair.
A Full Repair and Insuring Lease Agreement can contain particularly onerous Lease Obligations that can often necessitate costly repairs and periodic maintenance. For example, an obligation to keep a building in good and substantial repair and condition will always require the property to first be put into a good and substantial repair and condition. Without a Schedule of Condition, this liability will fall to the Tenant.
A well-written Schedule of Conditions can greatly reduce this liability.
When Should a Survey Be Carried Out?
A Schedule of conditions should always be undertaken as early as possible. Where a Lease is concerned, the Schedule of conditions must be undertaken before the Lease is signed.
Similarly, when acting in a Party Wall scenario, the Schedule of Condition must be undertaken before the commencement of works.
A poorly timed Schedule will serve little to no purpose and can actually do more harm than good.
Does the Schedule of Condition Have to be in the Lease?
A Schedule of conditions must be appended to the Lease and fully referenced for it to have any protective quality to either party.
When the lease documents are put together, prior to signing, this is referred to as engrossment and it is at this point, that the Schedule should be fully included within the Lease bundle.
Both the Landlord and Tenant should have full sight of the Schedule and agree its contents prior to agreeing on the Lease.
Additionally, the Lease Covenants should be revised to take the contents of the Schedule into account.
For example, the Lease may have previously covenanted the Tenant to “put and keep the demised premises in good and substantial repair and condition” However, as part of the engrossment process, the repair covenant should be altered to say “ put and keep the Demised Premises in good and substantial repair and condition. However, the Tenant is not obligated to put the Demised Premises in any better condition than that evidenced in the Schedule of condition.
Does a Schedule of Condition avoid future lease liability?
The standard of the document can vastly affect the level of protection provided. In order to provide a high level of service, the wider context of the instruction must be understood.
A very well-compiled Schedule of Conditions will provide a high level of protection for a Tenant prior to entering into a lease and will ultimately serve to limit a Tenant’s dilapidation liability.
Conversely, the same document can be used to protect a Landlord’s position should the property be in good condition prior to entering into the lease. A well-written Schedule of conditions can be used to document any deterioration in the condition and aid the dilapidations process.
We would always recommend a Schedule of Conditions. Without it, both parties are blind to potential liability.
