Tenant’s obligations – repairs, alterations & change of use

04 Feb Tenant’s obligations – repairs, alterations & change of use

Last week we looked at rent reviews, sub-letting and service charges.  This week we are looking at who is responsible for repairs, consent for alterations & change of use and also building insurance.

 

dilap building1. Repairs

Tenants’ repairing obligations should be appropriate to the length of term and the condition of the premises. Unless expressly stated in the heads of terms, tenants should only be obliged to give the premises back at the end of their lease in the same condition as they were in at its grant.

  1. Alterations and Changes of Use

Landlords’ control over alterations and changes of use should not be more restrictive than is necessary to protect the value, at the time of the application, of the premises and any adjoining or neighbouring premises of the landlord.

Internal non-structural alterations should be notified to landlords but should not need landlords’ consent unless they could affect the services or systems in the building.

Landlords should not require tenants to remove permitted alterations and make good at the end of the lease, unless reasonable to do so. Landlords should notify tenants of their requirements at least six months before the termination date.

  1. Insurance

Where landlords are insuring the landlord’s property, the insurance policy terms should be fair and reasonable and represent value for money, and be placed with reputable insurers.  Landlords must always disclose any commission they are receiving and must provide full insurance details on request.

Rent suspension should apply if the premises are damaged by an insured risk or uninsured risk, other than where caused by a deliberate act of the tenant. If rent suspension is limited to the period for which loss of rent is insured, leases should allow landlords or tenants to terminate their leases if reinstatement is not completed within that period.

Landlords should provide appropriate terrorism cover if practicable to do so. If the whole of the premises are damaged by an uninsured risk as to prevent occupation, tenants should be allowed to terminate their leases unless landlords agree to rebuild at their own cost.

4. Dilapidations

Landlords should handle all defaults promptly and deal with tenants and any guarantors in an open and constructive way. At least six months before the termination date, landlords should provide a schedule of dilapidations to enable tenants to carry out any works and should notify any dilapidations that occur after that date as soon as practicable.

When receiving applications for consents, landlords should where practicable give tenants an estimate of the costs involved. Landlords should normally request any additional information they require from tenants within five working days of receiving the application.

Landlords should consider at an early stage what other consents they will require (for example, from superior landlord or mortgagees) and then seek these. Landlords should make decisions on consents for alterations within 15 working days of receiving full information

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