Schedules of condition are one of those activities which seem to be left to the last minute when a tenant proposes to take a lease of a commercial property, and for smaller enterprises or individuals the cost may seem prohibitive when there are so many other demands on finances.
Do you really need a schedule of condition? What is the cost of a schedule of condition? Find out in our article!
How much does a Schedule of Condition Cost?
When entering into a lease, a Schedule of Condition (SoC) is a crucial document that can save tenants significant amounts of money in the long run. The schedule of condition cost, particularly for certain types of leases, can far exceed the fee for having one prepared.
Schedule of Condition Cost – What is a Schedule of Condition?
A Schedule of Condition is a detailed report that records the state of a property at a specific point in time, typically before a lease agreement is signed. This document can protect tenants from being held responsible for pre-existing conditions or damages when the lease ends.
Schedule of Condition Cost – Why is a Schedule of Condition Important?
Leases often contain repair clauses and other obligations, such as complying with statutes and regulations. These obligations can sometimes be implied by case law, which has developed over decades, setting precedents for interpreting lease contract wording. Without a Schedule of Condition, tenants can find themselves liable for repairs and maintenance issues that existed before they took possession of the property.
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GET A QUOTE FOR YOUR SCHEDULE OF CONDITIONSchedule of Condition Cost – The Role of a Property Lawyer and Surveyor
A competent property lawyer will assess the type of property and lease being proposed, considering the benefits of including a Schedule of Condition. Additionally, a well-informed commercial building surveyor can not only prepare the schedule of condition but also advise the prospective tenant on potential issues, such as obsolescence. This insight can often lead to renegotiating lease terms, potentially saving the tenant substantial sums of money.
Schedule of Condition Cost – Financial Implications
The initial fee for preparing a Schedule of Condition is often minimal compared to the potential repairs liability at the end of the lease. This makes the investment in a Schedule of Condition a wise financial decision.
Schedule of Condition Cost – How Much Does a Schedule of Condition Cost?
The schedule of condition cost can vary based on several factors, including the location, the experience of the commercial building surveyor, and any specialized skills required for the assessment. Most surveying practices charge between £200 and £400 per hour. The total schedule of condition cost will depend on the time needed to thoroughly inspect the property and document its condition.
Add extra time and fees for any specialist consultants and remember time on site is often more than doubled by processing the report, liaison with clients or their legal team and possibly advising on re-negotiation of lease terms.
A typical provincial high street retail unit with ‘RUP’ (residential upper part – one or two flats usually – possibly now used as office or canteen space) might cost £2000 + VAT to prepare a record – often there is no permission to remove wall linings and sales displays etc so the extent of the inspection might be restricted, but quicker to implement, unless other arrangements to inspect in detail can be agreed with the landlord. Empty shops with stripped fittings and bare walls can also prove reasonably straightforward to inspect unless left in chaos by the previous occupier.
A similar size office building is likely to have less open plan space and more small offices and rooms. Expect the time and schedule of condition cost to increase; typically 3000-£4000 plus VAT.
The schedule of condition cost is a small price to pay for the potential savings and protection it offers tenants. Engaging a knowledgeable property lawyer and a skilled commercial building surveyor can help ensure that the tenant’s interests are safeguarded, potentially leading to favorable lease terms and significant long-term financial benefits. Understanding and considering the schedule of condition cost is essential for any tenant entering into a lease agreement to avoid unexpected and potentially substantial expenses.
To help commercial building surveyors arrive at an accurate quote for this type of service you might assemble a data pack: check the correct address, current or proposed lease details, any marketing literature, photographs and highlighting any particular client concerns about condition or proposals to alter the property. This can all be emailed to the commercial building surveyor and will help obtain a quick fee proposal. Sometimes if there are likely to be contentious issues a building surveyor may wish to inspect prior to finalising a fee proposal – which is then fairer on both parties as a true reflection of the effort required to produce an effective document which can be relied upon in the future.
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