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Keeping buildings in good repair

Lewis Thompson sets out how landlord's works can avoid a schedule of condition on a new lease.

Galbraith was recently instructed to specify and carry out landlord's works to a Grade II* listed building on behalf of a private client.

The property, at 33 Stonegate in York, has an estimated construction date of the early 17th Century. Although a plaque on its faade marks the construction date as 1489, this is disputed by Historic England. Originally built as a house, the property has been converted into retail premises and commands a central position on one of central York's main shopping streets. 

The most recent tenant failed to carry out adequate maintenance, leading to the steady decline of the building fabric internally and externally. In the summer of 2016 the tenant went into liquidation, triggering the search for a new occupier. Given its prominent position, there was strong interest in the property, but it quickly became clear that its condition would be a sticking point when agreeing a lease with a new tenant. All interested parties insisted on a comprehensive schedule of condition to limit their repairing obligations during the period of the lease. 

A schedule of condition is often regarded as an excuse for tenants to do little or no building maintenance while limiting their dilapidations liability at lease end.

Given the age and condition of 33 Stonegate, it was deemed unacceptable for the property to go without substantial repair and maintenance for the term of the new 15-year lease.

Galbraith undertook a survey of the property to identify all urgent repairs required to the building fabric with a schedule of landlord's works developed and negotiated with the tenant's representatives. This formed part of the lease agreement and satisfied the tenants that the property would be left in such a condition to circumvent a schedule of condition. 

Landlords often view a schedule of condition as a necessary evil as they mean a slightly less desirable property, or one in poorer condition, can be let. This works when leasing the space is the top priority. However, in some cases - like 33 Stonegate - preserving the value of the building and keeping it in good repair is equally important.

Undertaking landlord's works can of course be expensive, but the long-term benefits to the value and condition of the property should not be overlooked and will help avoid even more costly repairs in the future. There is also the added bonus of steering clear of a schedule of condition, which limits the tenant's liability for dilapidations at lease end.