Guide to occupying a commercial building

In the first of three columns, Jonathan Shaw of Anderton Gables will detail three areas surrounding the occupation of a commercial building.

  • Jonathan ShawFirst stage: Pre-acquisition building assessment and schedule of condition
  • Second stage: Building conversion and adaptation
  • Third stage: Exit strategy
A commercial occupier needs to be aware of the potential liabilities of a property prior to taking a lease – much like if they were purchasing a freehold interest.

It is not unusual for a lack of due diligence at this expensive time to lead to major headaches during occupation or at lease end.

When considering taking a lease, we would recommend:-

A pre-acquisition building assessment

A pre-acquisition building assessment is a survey followed by a report upon the condition of the building and identifies likely maintenance and component replacement expenditure during the proposed term of occupation and also lease end dilapidations liabilities.

It is worthy of note that the solicitor drafting the lease may not have the opportunity to visit the premises and therefore this report can be a great advantage in achieving the correct lease terms to maximise the tenant’s protection.

In short, you cannot do better than not having the liability in the first place!

A schedule of condition

A schedule of condition is a factual document that includes an itemised description of the elements of the building and is cross-referenced to photographic evidence. It provides a benchmark for the condition of a building at lease commencement.

The parties to a lease agree to limit the tenants to ‘no better’ than as evidenced by the schedule of condition. So, to ensure you don’t end up refurbishing your landlords building – get some advice!