The repairing liability of a commercial property depends on whether or not it is a FRI (Full Repairing and Insuring) lease or a IRI (Internal Repairing and Insuring) lease – typically, the tenant is responsible for the repair, upkeep and maintenance of a property.

The Lease

Ultimately, it depends on what is stipulated in the lease, however, most standard FRI (Full Repairing and Insuring) leases, otherwise known as Triple Net Leases, mean the tenant is responsible for all costs associated with a commercial property.

The lease agreement, providing it is a comprehensive and formal lease, will cover the repairing liability of both the tenant and landlord. Informal leases and basic template leases fail to cover most bases, leading to ongoing disputes.

It is crucial to request and review a formal lease with your landlord before entering into a tenancy on a commercial property – and Shepherd Commercial always recommend a regulated and accredited solicitor, despite the increased cost.

The Landlord

The landlord is typically only responsible for the repair and insurance of a commercial property when it is vacant or void. During a tenancy, most leases will place the repairing liability onto the tenant.

Because landlords are liable for the repairing liability of a commercial property when it is void or vacant, it is always recommended to carry out a schedule of condition when entering a tenancy, so that a condition report of the property can be referred to when the liability changes hands.

The Tenant

During an FRI (Full Repairing and Insuring Lease) of a commercial property, a tenant is responsible for internal repairs, mechanical and electrical systems, health and safety compliance, external repairs and service charge contributions.

Some of those liabilities are covered as an insured risk, for instance despite a tenant being liable for the roofing of a commercial property, should major damage occur, this would lead to an insurance claim rather than the tenant paying out of their own pocket – bar the excess.