COMMERCIAL PROPERTY – EXAM NOTES
REPAIR CLAUSES
WHAT IS A REPAIR CLAUSE?
Ensures both parties know what parts of the property they are responsible for REPAIRS
repairing to avoid discrepancies
Provision in lease clarifying who is to be responsible for and who will pay for
the maintenance and repair of the premises
Tenants’ repairing obligations
should be appropriate to the
WHAT IS ITS MAIN PURPOSE?
length of term and the
To establish which of the parties has responsibility for repair and maintenance condition of the premises.
and also the extent of the demise to be repaired
Unless expressly stated in the
LANDLORD’S MAIN CONSIDERATIONS heads of terms, tenants should
only be obliged to give the
Does definition of property cover all areas for which tenant should be liable? premises back at the end of
Any parts which tenant is not liable will be Landlord’s responsibility but the their lease in the same
landlord recovers the cost via the service charge or other fixed charge condition as they were in at its
payments grant.
Ideally clause should include ‘rebuild, renew and reinstate’ as well as repair
Obtain a clear rent and impose responsibility on the tenant
Maintain the value of the landlord’s interest in the premises
Maintain the rental value
TENANT’S MAIN CONSIDERATIONS
Definition of property - Does definition of property include all areas for which tenant should not be liable e.g.
outdoors, walls & ceilings? To repair and maintain only what has been included within the definition of premises
Property should only have to be repaired to standard appropriate to the surroundings, nature and type of property
Tenant should resist any attempt made by landlord to render tenant liable for rebuilding/ renewing/ reinstating.
Tenant will want clause to state the tenant merely has to maintain the property to the level ascertained in the schedule
of condition
Tenant should not be responsible for inherent defects and should negotiate for an explicit clause saying the landlord
takes responsibility
Contamination - Tenant should not be responsible for contamination – should be excluded. Definition of
contamination should be inserted in a new clause confirming landlord bears responsibility for disrepair and any other
damage cause by contamination. Cross refer with service charge clause to ensure landlord doesn’t charge for cost of
remediation works
Uninsured Risks - Insured risks should be sufficient. Do they include terrorism? Flooding? Tenant would want to
negotiate a clause saying landlord bears responsibility for uninsured risks. However, typical landlord will make tenant
responsibility for uninsured risks.
To avoid an onerous repairing covenant, which could be costly and affect the future assignment
Too favourable and the rent review could be higher as premises are more marketable
Will not want to pay for cost in a short lease.
WHAT IS THE MEANING OF REPAIR?
Disrepair – tenant may incur liability only if the landlord can show that the premises have ‘deteriorated for some
previous physical condition’ – Post Office v. Aquarius Properties Ltd [1987]
EXAMPLE REPAIR CLAUSES
REPAIR CLAUSES
WHAT IS A REPAIR CLAUSE?
Ensures both parties know what parts of the property they are responsible for REPAIRS
repairing to avoid discrepancies
Provision in lease clarifying who is to be responsible for and who will pay for
the maintenance and repair of the premises
Tenants’ repairing obligations
should be appropriate to the
WHAT IS ITS MAIN PURPOSE?
length of term and the
To establish which of the parties has responsibility for repair and maintenance condition of the premises.
and also the extent of the demise to be repaired
Unless expressly stated in the
LANDLORD’S MAIN CONSIDERATIONS heads of terms, tenants should
only be obliged to give the
Does definition of property cover all areas for which tenant should be liable? premises back at the end of
Any parts which tenant is not liable will be Landlord’s responsibility but the their lease in the same
landlord recovers the cost via the service charge or other fixed charge condition as they were in at its
payments grant.
Ideally clause should include ‘rebuild, renew and reinstate’ as well as repair
Obtain a clear rent and impose responsibility on the tenant
Maintain the value of the landlord’s interest in the premises
Maintain the rental value
TENANT’S MAIN CONSIDERATIONS
Definition of property - Does definition of property include all areas for which tenant should not be liable e.g.
outdoors, walls & ceilings? To repair and maintain only what has been included within the definition of premises
Property should only have to be repaired to standard appropriate to the surroundings, nature and type of property
Tenant should resist any attempt made by landlord to render tenant liable for rebuilding/ renewing/ reinstating.
Tenant will want clause to state the tenant merely has to maintain the property to the level ascertained in the schedule
of condition
Tenant should not be responsible for inherent defects and should negotiate for an explicit clause saying the landlord
takes responsibility
Contamination - Tenant should not be responsible for contamination – should be excluded. Definition of
contamination should be inserted in a new clause confirming landlord bears responsibility for disrepair and any other
damage cause by contamination. Cross refer with service charge clause to ensure landlord doesn’t charge for cost of
remediation works
Uninsured Risks - Insured risks should be sufficient. Do they include terrorism? Flooding? Tenant would want to
negotiate a clause saying landlord bears responsibility for uninsured risks. However, typical landlord will make tenant
responsibility for uninsured risks.
To avoid an onerous repairing covenant, which could be costly and affect the future assignment
Too favourable and the rent review could be higher as premises are more marketable
Will not want to pay for cost in a short lease.
WHAT IS THE MEANING OF REPAIR?
Disrepair – tenant may incur liability only if the landlord can show that the premises have ‘deteriorated for some
previous physical condition’ – Post Office v. Aquarius Properties Ltd [1987]
EXAMPLE REPAIR CLAUSES
