Tenants: Why Repair Clauses Matter in Commercial Leases

When taking on a commercial lease, tenants often focus on lease length, location, and rent. One aspect that’s often overlooked is repair obligations. These clauses can have serious financial consequences if they’re not carefully reviewed and properly understood and negotiated. As a tenant, understanding what you’re agreeing to is crucial, especially in older or historic buildings, where hidden defects can quickly become costly surprises. 

In this article, Consultant Solicitor Katie Burgess outlines what commercial tenants need to know about repair clauses and how to protect your business before signing a lease.

Are you a landlord? Click below for what landlords need to know about repair clauses:

What Does “Repair” Really Mean? 

In legal terms, common phrases in leases often carry more weight than you might expect. For example: 

• “To put into good repair” means you must bring the property up to a good standard, even if it wasn’t in that condition at the beginning of the lease. 
• “To keep in good repair” means you must maintain the property in good condition throughout the lease, still implying that the property must be put into that condition if it is not already. 
• “Good and substantial repair” can be even more severe. This implies a higher standard and can require extensive works, potentially involving structural repairs or costly upgrades that you are liable for as the tenant. 

These phrases are not just semantics. They can translate into significant financial liability for commercial tenants. It pays to seek legal advice before entering into a commercial lease, to ensure you’re fully aware of your responsibilities. 

Older Buildings, Bigger Risks 

If you’re leasing an older property, your repair obligations can quickly become even greater. Hidden defects, outdated construction materials, and long-standing wear and tear can all fall on you as the tenant. This is the case even if the issues predate your lease – unless your lease limits this responsibility. 

A common and effective tool is a schedule of condition. This is a written record of the property’s state at the start of the lease and limits your duty to maintain it only to that standard.  

Tip: Make sure the schedule of condition is professionally prepared and legally referenced in the lease terms. A solicitor will ensure this is done correctly, ensuring you’re protected. 

Common Misconceptions About Repair Obligations 

Many commercial tenants enter leases under false assumptions about repair obligations, such as: 

• “Repairs are the landlord’s job” – not necessarily, only if the lease explicitly says so. 
• “If I didn’t cause the damage, I don’t have to repair it” – This is not always the case if your lease says the property must be kept in “good repair.” 
• “I’m not expected to fix pre-existing issues, especially if the building is old” – This is not always true without a schedule of condition in place. 

These misunderstandings can result in unexpected repair bills or claims from the landlord at the end of the lease. A solicitor can help you identify the extent of your obligations before you sign and ensure the lease is fit for your needs. 

Repair Obligations in Short Term or Flexible Leases  

Commercial tenants sometimes assume that short term or flexible leases have lower obligations when it comes to repairs. This is not always the case. Many short term leases include the same repair clauses as longer-term agreements, which can have significant financial consequences for tenants. 

This can be especially problematic in older or poorly maintained buildings, where the potential costs may outweigh the value of the short-term lease. Without clear limitations like a schedule of condition, you may find yourself facing unexpected costs throughout or at the end of the lease. 

So, commercial tenants should always carefully review the repair obligations in their lease, and seek legal advice to ensure they’re not taking on more than expected. 

Click here for more information on short term leases.

Why It Matters 

At the end of a lease, your landlord may issue a dilapidations claim, seeking compensation for repairs they believe you are responsible for. Without clear limits on your repair obligations, these claims can be financially draining for your business. 

Repair clauses are binding legal commitments. To avoid costly surprises, before signing, always: 

• Get specialist legal advice 
• Commission a survey 
• Insist on a schedule of condition where appropriate 

These steps can protect you from unexpected liabilities and ensure your lease terms reflect what you’re truly willing to take on. 

Need help reviewing a lease? Contact Consultant Solicitor Katie Burgess for advice tailored to your situation.