Say what you mean

It is rare for commercial leases to be meticulously read by intending purchasers, except for the rent and rent review clauses. But a purchaser could be left seriously out of pocket by ignoring the responsibilities imposed by the clauses relating to repairs in a lease.

It is all too tempting for the purchaser simply to hope that once in possession he will not be required to do more than the obligatory monthly window cleaning and the yearly two coats of paint.

But the purchaser should be aware that the courts are giving an increasingly onerous interpretation to the word "repair". In the past, if carrying out repairs amounted to an improvement of the landlord's property, tenants were not required to carry them out. However, recently tenants have been required by the courts to carry out remedial work within the scope of their lease.

This has been the case even where the damage has been caused by a structural defect in the property. Even more perilous, a lease can be so widely drafted as to leave it absolutely free from judicial doubt that what has been imposed on the tenant is a duty to reconstruct the entire property if necessary.

The purchaser may not realise that certain wording in their lease actually requires them to put the property into an enhanced state of repair, following which the repairs must be kept up to that standard. Accordingly, a clause "to keep" premises in repair can actually mean putting the property in repair, even if at the date of the purchase it was in disrepair. A purchaser who is asked to enter into this form of repair covenant should be aware of it when negotiating the level of rent.

The duty to repair usually at the least involves restoring the property at the end of the lease to the same condition it was at the beginning of the lease. To avoid disputes over this, the purchaser would be well advised to invest in a detailed structural survey. The purchaser should then insist that a schedule of condition based on the survey is incorporated into the lease.

With new properties, the purchaser should be alive to the possibilities of inherent defects. He/she does not want to be unwittingly bearing the cost of problems in the original construction or design by accepting a full repairing obligation.

In considering their repair liabilities, tenants must not disregard those of their landlords because, in the case of a dispute, the tenant's responsibilities will be defined by the court in the context of the landlord's obligations. If a lease does not stipulate responsibility for a particular repair, there is a risk that the landlord could succeed in shifting the cost of it on to the tenant. In the interim, time and money will have been wasted by the tenant in legal proceedings.

When the purchaser has made a commercial decision as to what his maximum liability for repairs should be, the wording used to express this should be considered. Where the obligation is minimal, requiring cleaning and tidying work only, the task is easy, The same is true where the repair covenant is of the highest scale and requires the rebuilding of the entire property if necessary.

A variety of phrases are used to describe mid-scale repairs, however. For example, "to substantially repair", "to maintain in good and tenantable repair and condition" and "to well and sufficiently repair". In the event of a dispute, any legalese will be translated by the courts so tenants need to make their intentions clear in the lease, and not rely on buzzwords.

Prospective tenants need to be wary of taking on more responsibility than they intended or can afford. Devoting inadequate attention to this part of the lease can end up being extremely costly.

Bryan Emden is a commercial property partner in City law firm Fox Williams.