Repairs and alterations
Repairs
One of your obligations in the lease will be to repair the premises to a specified standard. The first issue, is what ‘the premises’ consist of. If you are going to occupy a whole building, then it is likely that you will be granted a lease of the whole building. That means your repairing obligation will include the structure. But if you are only going to occupy part of the building, it is likely that the lease will say that ‘the premises’ includes the internal and non-structural parts only, and that the structure and exterior of the building remain with the landlord. In that case your repairing obligation only extends to things such as the plasterwork and the décor. You need to read the specific description of the premises to discover the position.
The second question is what level of repair is required. Some leases say that the tenant must ‘keep the premises in good and substantial repair and condition’. That is about the highest level of obligation. If the obligation is ‘to put and keep the premises in good and substantial repair and condition’ that means that you may have to improve the premises, and bring them up to a higher standard than they originally are. But even ‘keep’ could be construed as including ‘put’. A lower level of obligations sometimes seen is: ‘keep the premises in a reasonable state of repair and condition’.
If you are faced with such obligations, and you are responsible for the structure and the exterior of the building, then clearly you must have a building survey before you sign the lease, to make sure that you will not have to replace the roof or deal with major defects.
If defects are revealed, a solution is to have a schedule of condition prepared detailing the defects in the building, backed up by photographs, and have a clause put in the lease saying that you are not required to return the premises in any better state of repair than is shown in the schedule of condition.
At the end of the lease, the tenant is required to return the premises to the landlord in the required condition. If the tenant does not do so, the landlord is entitled to make a ‘dilapidations’ claim for the loss in value, or the cost of repair works, whichever is the lower figure. The tenant may not have to pay VAT on any resulting compensation if certain conditions are fulfilled - check with your accountant.
Alterations
The lease will specify what alterations you are allowed to carry out to the premises. Leases often permit tenants to carry out internal, non-structural works, but only with the landlord’s consent, which the landlord may not unreasonably withhold. The lease usually prohibits any alterations to the structure or exterior altogether.
If the definition of ‘the premises’ in the lease limits them to the interior only, then you cannot carry out any structural or external alterations because the structure and exterior do not form part of the premises you have leased. So if you know you intend to carry out any alterations, you should check the lease provisions carefully at the start.
If the landlord allows you to carry out alterations, you will usually be required to reinstate the premises at the end of the lease to the same condition they were in when the lease was granted.
Protect yourself
Buyer beware!
The legal principle which still applies to property buying is: Caveat Emptor - Let the buyer beware! If the property falls down after you buy it, that is your problem, not the seller's. So you have to find any problems which are likely to put you off buying by carrying out a survey.
Survey
A valuation is not a detailed report on the physical condition of the property. For that you need a survey. (You may save money by getting the same surveyor to do the valuation and the survey at the same time.) A 'Building Survey' is the most detailed structural survey. It's a comprehensive report on the construction and condition of the property, the materials used, past works, and defects of all kinds.
Specialist reports
Your surveyor may recommend that you have specialist reports if he finds evidence of problems - e.g. untreated damp, dry rot, wet rot, woodworm, or any other infestation. A treatment company such as Protim or Rentokil can do a report. They will charge a fee for doing the report, but they often set it off the price for any works you then ask them to do. You can also have specialist reports on electrical installations, gas appliances and drains, and from a structural engineer if the circumstances require it.