Key Takeaways
- Understanding your commercial lease repairing obligations is essential because the wrong clauses can leave tenants responsible for costly repairs, including pre-existing structural issues.
- Full repairing and insuring (FRI) leases can make a tenant liable for the entire building’s repair costs regardless of the property’s age or initial condition.
- Insisting on a schedule of condition before signing an FRI lease limits your liability to the state of repair at lease start and can protect you from six-figure dilapidations at lease end.
- Landlords may resist a schedule of condition, but you should consider walking away or demanding a significant rent reduction if you cannot cap your risk.
- Tenants and landlords both benefit from negotiating clear and realistic repairing standards, such as referencing the property’s age and character instead of accepting “good and substantial repair” wording.
- Internal repairing (IRI) leases usually limit tenant responsibility to interior repairs while landlords retain structural and external obligations; always check any service charge caps before agreeing terms.
- If you ignore disrepair during the lease term or fail to maintain records, you risk triggering Jervis v Harris clauses, which could result in landlords demanding immediate payment for repairs as a debt.
- Section 18 of the Landlord and Tenant Act 1927 can limit end-of-lease dilapidations claims, but it is not a complete safeguard, especially if the landlord uses a Jervis v Harris clause.
- Acting early and instructing our solicitors for a lease review before you sign can save you tens or even hundreds of thousands in unexpected liabilities and disputes.
- Doing nothing when negotiating your commercial lease repairing obligations puts your business and personal finances at serious risk in the event of a claim or dispute.
Who Is Liable for Repairs in a Commercial Lease and How Can You Limit That Risk?
Most commercial tenants sign a full repairing and insuring (FRI) lease without realising this can make them responsible for every single repair to the building, often including problems that existed before they even moved in. One common mistake is assuming that “insuring” covers all major costs, when in fact tenants may end up paying six-figure sums for dilapidations, especially at the end of the lease term.
This guide explains how commercial lease repairing obligations work in England and Wales, why FRI leases pose such a large financial risk, and the steps you must take to limit liability before signing. We cover the crucial differences between full and internal repairing leases, the value of a schedule of condition, the impact of Jervis v Harris clauses, and negotiation tactics that save significant sums. By the end, you will know how to spot dangerous clauses, what to demand from your landlord, and when it is essential to involve a solicitor.
If you want clarity or hands-on help reviewing your commercial lease repairing obligations, our solicitors at Go Legal are ready to protect your position. Call 0207 459 4037 or book a free consultation to get tailored, practical advice before you commit.
What Are Repairing Obligations in a Commercial Lease?
Repairing obligations in a commercial lease are the contractual duties that determine whether the tenant, landlord, or both must repair, maintain or even upgrade the property during and at the end of the lease term. This is the biggest financial risk after paying rent: if you breach these obligations, you may face a dilapidations claim that can cost from tens of thousands up to several hundred thousand pounds.
Three main levels exist:
- Full Repairing and Insuring (FRI) Lease: Tenant repairs and maintains the whole property (structure, exterior, interiors). Tenant typically also pays or reimburses the building insurance. This is the most common commercial lease in England and Wales.
- Internal Repairing (IRI) Lease: Tenant repairs and maintains only the inside of the property (walls, floors, decoration, internal fixtures). Landlord is responsible for the structure, roof and external areas, but may recover costs through a service charge.
- Landlord-Repairing Lease: Rare in commercial property. Landlord retains repairing duties for almost all aspects.
Early instruction of a specialist solicitor before signing your lease is essential to identify and limit your risks.
FRI (Full Repairing and Insuring) Leases: What You Are Really Signing
What “Full Repairing” Means in Practice
An FRI lease typically makes the tenant responsible for every part of the property: structure, roof, exterior, interior, plant, services, and, if demised, shared or common parts. Critically, unless the lease specifically limits this duty, the tenant may be liable for existing or latent defects as well as any that arise during the term.
The obligation usually applies “regardless of age or condition,” so unless a schedule of condition is attached, the tenant’s baseline is assumed to be perfect. That means you could be asked at lease end to replace an old roof, even if it was already near the end of its life when you entered.
The “Insuring” Part: Why It Doesn’t Protect from Dilapidations
The common misconception is that because the lease is “full repairing and insuring,” the insurance will protect you from major repair costs. In reality, the landlord will insure the building at your expense, but insurance usually covers only risks like fire, flood, or vandalism. It almost never covers gradual deterioration, normal wear and tear, or the end-of-life failure of major elements. These are the very issues that drive dilapidations claims.
Real-World Cost Example: FRI With and Without a Schedule of Condition
IRI (Internal Repairing) Leases: Sharing the Burden
What IRI Means
In an internal repairing lease, the tenant is only required to repair and maintain the interior of their premises: internal walls, floors, ceilings, fixtures, fittings, and internal plant. The landlord retains responsibility for the structure, roof, external elements, and common parts. Structural and external repair costs are often recovered from tenants collectively via a service charge.
When You Will See IRI
You are likely to see IRI leases in:
- Multi-let office buildings or shopping centres
- Business parks with various tenants
- Short-term commercial lets (one to five years)
- Retail units in mixed-use blocks
Here, the landlord is best placed to control and manage major property elements.
Tenant Exposure Under IRI
IRI leases carry a lower risk of direct liability for big-ticket repairs like roofs or structural works. However, beware of service charges: landlords can still pass on large repair bills unless the lease caps your service charge contributions.
How Do Repair Clauses Differ for Whole Buildings Versus Part of a Building?
Repairing obligations change depending on whether you are leasing an entire property or just part of one. If you take the whole building, you are generally responsible for its entire repair and maintenance unless the lease limits your obligations.
If you lease only part of a building (e.g., one office out of many in a block), your obligations are usually confined to that part—primarily the interiors. The landlord remains responsible for the building structure, roof, and shared or common spaces, and will typically recover costs for these areas through a service charge.
Schedule of Condition: The Tenant’s Get-Out-of-Jail Card
What a Schedule of Condition Is
A schedule of condition is a detailed photographic and written record of the property’s state at the start of the lease. When appended to the lease and referenced in the repairing covenant, it redefines your responsibility: you must keep or return the property in no worse condition than at commencement. This is crucial, as it avoids the default position where the tenant could be liable to upgrade the building to a better state than when they entered.
What It Includes
An effective schedule of condition should feature:
- Extensive photographs of all internal rooms and external elements, including the roof, façade, windows, doors, car park, drainage, gutters, and plant.
- Written commentary describing the age, condition and any visible defect for each key component.
- Both parties signing and dating the document, which must be appended to the executed lease and explicitly referred to in the repairing provisions.
Without these measures, you risk a court or arbitrator ignoring the schedule and holding you liable under the default lease wording.
How It Protects the Tenant
- Decoration scenario: The schedule records “walls painted white, minor scuffs and marks, last decorated five years ago.” At lease end, the property matches the entry condition, so the tenant avoids an expensive redecoration claim.
When You Must Insist on a Schedule
You should always demand a schedule of condition if:
- The building is more than 15 years old
- It is an FRI lease
- The property is not in newly refurbished or excellent condition
- The lease is long-term (over 10 years)
- High-value plant or assets are already aged
A schedule is optional for:
- Brand-new or recently refurbished properties with detailed reports
- Short-term IRI leases where the landlord is clearly responsible for all structure and services
How to Obtain a Schedule of Condition
- Instruct a RICS-accredited surveyor early, ideally before finalising heads of terms.
- The surveyor prepares a thorough photographic and written report.
- The lease’s repairing covenant is amended to reference the schedule.
- Both parties sign and append the schedule to the executed lease.
Cost is usually between £1,500 and £5,000—negligible compared to the potential savings.
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Jervis v Harris Clauses: The Landlord’s Nuclear Option
What a Jervis v Harris Clause Is
Some leases contain a “Jervis v Harris” clause. Ordinarily, the landlord must wait until lease expiry to claim for a breach of repairing obligations (a dilapidations claim). A Jervis v Harris clause allows the landlord to serve notice during the lease, then enter the premises, carry out the outstanding repairs themselves, and require the tenant to pay the cost on demand as a debt.
Standard Wording Example
“If the Tenant fails to comply with repairing obligation within 28 days of the Landlord’s notice, the Landlord may enter and execute works and recover the cost as a debt, payable within 14 days of demand.”
Why It Is So Risky for Tenants
A Jervis v Harris clause means:
- The landlord can recover 100 percent of their repair costs from the tenant immediately, not just the diminution in the property’s value at lease expiry
- The section 18 cap on dilapidations from the Landlord and Tenant Act 1927 does not apply
- The tenant cannot offset these sums against rent or withhold payment—the cost becomes an immediate debt
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Negotiating Repairing Obligations: Tactics for Tenants and Landlords
For Tenants: 5 Tactics to Limit Exposure
- Insist on a schedule of condition. This is non-negotiable for older buildings.
- Negotiate a fair repairing standard. Change “good and substantial repair” to “tenantable repair and condition” or “fit for the permitted use.” Specify the standard is to be measured “having regard to the age and character of the property at lease start.”
- Exclude structures and major items if you have a short lease. Confine your duty to the interiors, with the landlord retaining responsibility for roof, structure, foundations, and primary services.
- Cap your total liability. Where possible, include a clause stating your total exposure is limited to a fixed sum or a set number of months’ rent.
- Use a dilapidations fund. Make regular payments into a reserve, drawn on for end-of-lease works—this can avoid nasty surprises.
For Landlords: Protecting the Asset Without Scaring Off Tenants
- If agreeing to a schedule of condition, increase rent to reflect the greater risk you are holding—but make this transparent.
- Retain Jervis v Harris rights, but limit them to necessary urgent or structural works and allow a longer notice period.
- Reserve “step-in” rights for major failures that could cause further property damage.
- Introduce a sinking fund clause in service charge schedules for major repairs, minimising the need for lump-sum calls.
- Require tenants to commission mid-term RICS condition surveys and complete identified works within a set period, encouraging maintenance throughout the lease.
The Negotiation Process
- Set repairing allocations and reference to a schedule of condition at heads of terms.
- Commission a survey, review the draft lease, and highlight risk areas such as ambiguous service charges.
- Amend the draft to add schedules, carve-outs, and liability caps where possible.
- Check that all negotiations are reflected in final documents—nothing is agreed until it is in the executed lease.
To instruct a solicitor to negotiate your repairing obligations, or for a full lease drafting service, you may also find our commercial lease drafting and negotiation service useful.
Worked Example: How a Schedule Saved a Tenant £140,000
Scenario:
A manufacturing SME agrees to a 10-year FRI lease on a 10,000 sq ft 1990s industrial unit, paying £60,000 per year. The survey reveals an aged roof (28 years old), cladding corrosion, uneven floors, and dated electrics.
Negotiation:
- Landlord initially insists on FRI with no schedule at £60,000 per year.
- Tenant counters: FRI with schedule at £60,000 or FRI with no schedule at £45,000 (a £150,000 discount over ten years).
- Landlord agrees to the schedule rather than lower the rent.
- RICS surveyor prepares a schedule (£2,800) that is attached to the lease.
Outcome after ten years:
- Roof fails in year eight and is replaced at landlord’s expense (according to schedule).
- Tenant pays £11,000 for internal works only.
Without schedule:
Tenant would have faced: roof £95,000, cladding £40,000, electrics £18,000, internals £11,000 (£151,000).
Net saving: ~£122,000 (after factoring in surveyor cost and rent premium).
5 Repairing-Obligation Mistakes That Cost Six Figures
- Signing an FRI lease without a survey or legal review. Result: liability for items like roofs or structural repairs worth £200,000+.
- Assuming insurance covers everything. Most repairs are not covered by insurance; dilapidations remain your cost.
- Not insisting on a schedule of condition because the landlord says it is not “standard.” Result: all previous wear, defects, and damage become your problem.
- Ignoring or deferring minor repairs. Small leaks can cause major structural issues and trigger immediate landlord intervention and costs under Jervis v Harris clauses.
- Failing to maintain records of repair and maintenance. If you cannot prove work has been done, you risk inflated dilapidations claims.
Frequently Asked Questions
What is the difference between FRI and FRI with a schedule of condition?
Both require tenants to repair everything, but FRI with no schedule means returning the property in perfect condition regardless of how it was at lease start—so you inherit all prior defects. The schedule caps liability to the entry state, protecting you from the landlord’s historic maintenance issues.
Can a landlord refuse to allow a schedule of condition?
Yes. If they refuse, you must weigh whether to pay considerably less rent (to offset your unlimited risk) or to walk away entirely from the deal.
Are commercial tenants ever responsible for repairs caused before their lease started?
Yes. If you sign an FRI lease without a schedule of condition, you may have to put the property “in repair” even if that means fixing old or hidden defects.
Should I have a survey done before signing a commercial lease?
Always. A RICS building survey and schedule of condition helps uncover expensive defects and can reduce or even eliminate dilapidations liability at lease end.
Do all dilapidations claims have to go to court?
No. Most are settled through negotiation, referencing the lease, any schedule of condition, and factual evidence. Early advice from your solicitor increases your chances of reducing an inflated claim.
What are the risks of ignoring minor defects during the lease term?
Minor defects can worsen into significant liabilities if ignored, increasing end-of-term costs and even triggering immediate action and bills under Jervis v Harris clauses.
Is it possible to negotiate out of FRI obligations entirely?
Rarely possible—except for major, high-value tenants or very short terms. Most tenants find more leverage by limiting the scope or insisting on a schedule of condition.
Who pays for repairs if the building is destroyed by fire or flood?
The landlord arranges insurance, which you pay for. Insurance may cover fire or flood repairs, but age-related or maintenance failure is excluded—those costs are yours unless excluded in the lease.
How can I check if my service charge is capped or open-ended?
Read the lease’s service charge schedule, or ask your solicitor to check before signing. An uncapped service charge is a significant hidden risk.
Can I challenge a landlord’s interpretation of the repairing covenant?
Yes. Challenges may succeed based on the repairing clause’s wording, supporting evidence, and the property’s documented condition at lease start. Early legal advice is always advised.
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When to Instruct a Solicitor
Seek professional advice if you are:
- Taking or renewing a lease on a building over 10 years old
- Offered FRI terms with no schedule of condition
- Reviewing a draft lease where repairing terms exceed two pages or mention “good and substantial repair”
- Served with a Jervis notice or a terminal dilapidations claim
- A landlord wanting to protect asset value while letting the property quickly
- Assigning a lease where the new tenant is negotiating repairing obligations
Go Legal’s service includes:
- Pre-lease review of draft repairing covenants and schedule guidance, including referral to an independent surveyor
- Negotiation and redrafting to limit your risk—schedules, carve-outs, realistic standards, or deletion or limitation of Jervis v Harris clauses
- Landlord-side drafting that balances strong protection with market realism for tenant attraction
- Dispute resolution—robust challenge to dilapidations and Jervis claims, negotiation, or urgent litigation
Conclusion
Commercial lease repairing obligations are the number one hidden liability for commercial tenants in England and Wales. An FRI lease without a schedule of condition is effectively a blank cheque to the landlord, committing you to replace every end-of-life building element at your own expense—even if they were already failing when you moved in.
Three rules for tenants:
- Understand that FRI really means unlimited structural liability, not just insurance
- Insist on a schedule of condition if the property is older than 10–15 years or less than excellent condition—a small spend here saves six-figure sums at lease end
- Negotiate for fair standards—use “tenantable” or “having regard to age,” not the open-ended “good and substantial repair”
For landlords:
A fair repairing covenant attracts more and better tenants, reduces voids, and leads to fewer disputes. Rejecting schedules on old stock only drives tenants away or demands a steep rent discount.
If you are negotiating a lease or facing a dilapidations claim, book a free consultation. We will tell you exactly where you stand and how to protect your interests.
















