Repair obligations in a catering lease: what to check

Because they can be a significant, costly liability for the tenant. A commercial lease sets out who is responsible for repairing and maintaining the premises (building, structure, interior, exterior, services), and to what standard - and these repair obligations can place substantial responsibility (and cost) on the tenant. Depending on the lease, a tenant can be responsible for a lot of repair and maintenance, potentially including significant repairs to the premises, which can be a major and sometimes unexpected cost over the term. So the repair obligations are a key part of the liability of taking a lease, not a minor detail - and they are committed for the term (often years) once signed. A tenant who signs without understanding them can find themselves liable for costly repairs they did not anticipate (including putting right existing disrepair, or major structural repairs). So it is essential to check the repair obligations carefully before signing - to know what repair and maintenance responsibility (and cost) you are taking on, and to negotiate where possible - so there are no costly surprises. So repair obligations matter because they can be a big, costly liability committed for the lease term - check them before you sign. This is general commentary, not legal advice.

A full repairing (and insuring) lease - an FRI lease - is one where the tenant takes on full responsibility for repairing and maintaining the premises (typically the whole premises, including the structure and exterior), and often for the cost of insuring the building too. It is common in commercial property. It is a substantial liability, because you become responsible for keeping the whole premises in repair - which can include significant and expensive repairs (structural, roof, building fabric) over the term, potentially a large, uncertain cost. So under an FRI lease, the tenant carries much more repair responsibility than under a lease where the landlord retains responsibility for the structure and exterior. Many commercial leases are FRI (or effectively so, via service charges on a shared building), so it is important to check whether yours is, and to understand the full extent of what full repairing means for the specific premises (which, for older or larger premises, can be a big commitment - potentially costly structural or building repairs). So check whether the lease is full repairing, and what taking on full repair of the premises entails - it is a key determinant of how much repair liability you are taking on. Take proper advice on this. This is general commentary.

The risk is that a repair obligation can oblige you to put right disrepair that already existed when you took the lease - inheriting the previous state's repair liability, potentially a large hidden cost. A repair obligation to keep the premises in good repair generally means you must keep them in good repair, which can include putting right disrepair already there when you took the lease (bringing the premises up to the required standard, at your cost). So if the premises were in disrepair when you took them, a full repair obligation could make you liable to repair that pre-existing disrepair - effectively inheriting someone else's repairs, which can be a significant hidden cost. The protection is a schedule of condition: a record (often with photographs) of the premises' condition at the start of the lease, agreed and attached to the lease, which can limit your repair obligation so you are not liable to repair beyond (or to a better standard than) the recorded condition - capping your liability at the premises' condition when you took them. So where the premises have existing disrepair or are not in perfect condition, check the existing condition (via a survey) and consider a schedule of condition to avoid inheriting the repair liability for the existing state. So guard against taking on existing disrepair, using a schedule of condition. This is general commentary.

A schedule of condition is a record - often including photographs - of the condition of the premises at the start of the lease, agreed between the parties and attached to the lease. Its purpose is to limit the tenant's repair obligation: it can cap the obligation so the tenant is not liable to repair beyond (or hand back the premises in better condition than) the recorded condition. In effect, it protects the tenant from being obliged to put right pre-existing disrepair or to return the premises in better condition than they were received - limiting the repair liability to the premises' condition when the lease was taken. This matters because, without it, a repair obligation to keep the premises in good repair could oblige the tenant to repair existing disrepair (inheriting that liability). So a schedule of condition (properly prepared, and with the repair clause referenced to it so it actually limits the obligation) is an important protection, especially for premises that are not in pristine condition. It should be prepared before signing (recording the actual condition), ideally with surveying advice, and its effect on the repair obligation confirmed by legal advice. So a schedule of condition is a record of the premises' starting condition that limits the tenant's repair liability to that condition - a key protection to consider. This is general commentary; take proper advice.

A catering lease may make you, as tenant, responsible for maintaining the kitchen and its services - which for a catering premises is substantial. A catering premises has significant services and equipment - notably the extraction/ventilation system, building services, and possibly kitchen equipment - which need maintaining and can be costly. The lease's repair and maintenance obligations may put responsibility for maintaining these on you (as part of the premises and services you are responsible for), so check what kitchen and services maintenance the lease makes yours. The extraction system is a relevant example: extraction cleaning and maintenance (a regular requirement for a kitchen, for fire safety and function) may fall to the tenant under the lease, and leases sometimes specifically require the tenant to maintain and clean the extraction and provide evidence of it - so check the extraction (and other services) maintenance obligations. More broadly, the lease may make you responsible for maintaining the kitchen's services and equipment and the building services - a real, ongoing cost and responsibility forming part of the lease's liability. So check what maintenance of the kitchen and its services (extraction especially) falls to you under the lease. This connects the lease terms to the practical upkeep and cleaning of the kitchen. This is general commentary.

Yes - because the repair obligations can be a major, costly liability and leases are complex, get proper professional advice (legal and surveying) before signing. Legal advice: a solicitor experienced in commercial property/leases to review the terms, explain your repair (and other) obligations, identify the risks (full repairing obligations, existing disrepair liability), and advise on and help negotiate the terms - understanding the legal obligations and protecting your interests. Surveying advice: a surveyor to assess the condition of the premises (identifying existing disrepair and issues), advise on the repair implications and likely repair costs over the term, and help with a schedule of condition where appropriate - understanding the physical condition and repair liability. Together, legal and surveying advice give you a proper understanding of the repair obligations (and the wider lease) and the physical condition - so you know the liability you are taking on, can negotiate improvements or protections (like a schedule of condition), and can decide whether to proceed with eyes open. So get proper legal and surveying advice before signing a catering lease, rather than committing to a costly liability blind. This is essential given the potential cost and the commitment involved. This is general commentary, not legal advice; always take proper professional advice on a specific lease.