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18th May 2012

Be concerned. Be very concerned!

The big issue in a commercial property lease.

What does a good lawyer look at first when you show him/her the lease of a commercial property you intend to take on as a tenant?

Is it the rent? No.

Is it the length? No.

Is it the plan? No. Although all of these will be discussed with you later.

The big focus should be on the repairing obligation. This is where the killer unexpected cost can hit you.

Landlords want an FRI lease. This means "full repairing". If you sign up to this then it doesn't matter if the property is in bad shape when you take the keys. You have agreed to bring it into, keep it in and leave it in good tenantable condition. You will understand the effect of this at the end of the lease when the landlord's surveyor serves a Schedule of Dilapidations requiring you to spend £thousands on the property. Take the repairing obligation very seriously and negotiate it right up front. You should be obsessive about it. We are....because the wrong decision will end in tears.

Also Scots law is very different from English law on this one. Clients based in England may find it surprising that our courts will happily order a tenant to give the landlord back something in far, far better condition than it originally was if the tenant has signed up to full repairing. Fairness doesn't come into it.

Also remember that the issue of who does what repairs should impact on the rent agreed.

Speak to us sooner rather than later please when leasing commercial property.

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