Fully Repairing & Insuring Leases
Most commercial property is leased on what is known as a Fully Repairing & Insuring Lease, or an FRI Lease.
These FRI leases vary in complexity and can be anything from a simple two-page document to one that is 70 or so pages long. It all depends on the landlord in most cases, as there is no such thing as a “standard lease” when it comes to commercial property issues.
Whilst we’re not lawyers, being Chartered Building Surveyors, we deal with commercial property leases every day. Actually, it would be more accurate to say that we deal with the fall out from these leases every day!
Regardless of how well a lease is constructed, there is always room for misunderstanding and disagreement and in most cases, the solicitors on both sides (the landlord’s and the tenant’s) will insist that they are right and that whichever side you happen to fall on, you have a very good case.
Ordinarily, when you’re first signing up for an FRI lease, there won’t be that many problems or difficulties. It’s only when the lease ends or you wish to surrender it that the problems begin to appear, so we strongly advise talking to a building surveyor, (hopefully one of ours), before you agree to any new lease arrangement, even if you have the best legal representation available.
That’s because we understand the full implications of the clauses and what they mean to you when it comes time to leave the premises.
In a lot of cases, our advice at the outset could save you significant amounts of money. We’ll talk you through not only the legalese jargon used in an FRI lease, but we’ll spell out exactly what could happen if a particular clause or term is not met.
For example, all commercial property leases have terms that state that the property must be returned back to the landlord in a similar condition to when it was initially rented out.
As a tenant, you might think that the new mezzanine floor you built and the fantastic office partitioning you erected actually add value to the premises. Think again. Your landlord will want you to rip it all out and reinstate everything back to how it was before it was leased to you.
But it doesn’t end there, because the quality of the reinstatement works will also be specified within the terms of the lease – and some are a lot more onerous than you might think – and the differences can mean that you have to spend a lot more money than you might have thought in order to do the reinstatement works.
Then there’s things like regular redecoration clauses, which many companies tend to disregard entirely and which cost them dearly at the end of the lease.
Our expertise in commercial property FRI leases could prove invaluable. Whether you are just about to take on or renew a lease, or if you’re at the end of a fully repairing and insuring lease and facing a dilapidations claim that you didn’t expect, call us now on 0121 711 7110 and discover what we can do to help reduce your costs.
There’s no obligation and we don’t charge anything for initial consultations.