Reasons for having a Schedule of Condition carried out
A Schedule of Condition identifies where any changes have been carried out already by the present owner when compared against the agreed alterations (often known as 'licenses').
Schedules of Condition
In years to come you will remember (with a smile, hopefully) what the business was like on day one
In our experience most lessees / tenants / businessmen carry out lots of repairs to enable their business to be as profitable as possible (or that is the original aim, until they meet a builder that runs over time and over budget, but that is another story!). These ‘improvements' should have had agreement from the landlord (in the case of most leases that we have been involved with) and a license should be issued.
Over the years we often find that as the relationship between the landlord and the lessee develops, an informal approval may be given in the form of a verbal agreement on the phone, for example, which can be dangerous for both parties when a lease comes to an end, and this is one of the advantages of having management companies who will generally stick more rigidly to issuing licenses (as they often gain fees from them).
Problems can arise
The problem arises where perhaps the original landlord retires or sells the property investment to another company who are much stricter with regard to their dilapidations claims. This may be because when they purchase the property it is purchased at a premium with the incentive by the landlord being that they will be able to serve an Interim Dilapidations Schedule or a Final Dilapidations Schedule to the present lessee / tenant / business owner and get him to bring the property up to modern standards (and we can assure you that this happens). This can be of great benefit before you take on the lease, as it allows you to negotiate for alterations and repairs that have been carried out by the present tenant/lessee that you do not wish to take on responsibility for.
