Schedule of Condition
If you are taking a lease on a commercial building, whether an industrial unit, retail unit or and office space a Schedule of Condition is a very important document that should be attached to your lease.
A Schedule of Condition is a written report with photographs documenting the condition of a commercial building either externally, internally or both depending on the repairing obligations of the lease.
Commercial leases are either fully repairing and insuring (FRI) or internally repairing and insuring (IRI)
FRI: This repairing obligation means that a tenant is responsible for keeping in repair and insuring the exterior and interior of the building.
IRI: This repairing obligation means that a tenant is responsible for keeping in repair and insuring the interior only of the building. In this case the landlord is responsible for the exterior of the building.
Having a Schedule of Condition can be useful when a lease comes to an end. Often there are disputes between a landlord and a tenant over repairing obligations. The schedule can be referred to in negotiations, as it is a record of the condition of the building when the lease started.