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Archive for May, 2009

Statutory compliance?

Modern leases of commercial property usually contain a tenant’s covenant to comply with statute.  In preparing a schedule of dilapidations at the end of the term (”a terminal schedule”), many a building surveyor will home in on this covenant and purport a breach.  In many cases, they do so erroneously and without the necessary detailed consideration.

The wording of the covenant will vary from lease to lease and should be studid with care.  It might, for instance, only apply during the term and not once the term has ended.  One should also examine the covenant to yield up the property to ascertain whether its ambit is wide enough to incorporate the covenant to comply with statute (or whether it applies, for instance, simply to the covenant to repair).  One should also give thought to any covenant given by the tenant to re-instate - this may require works, which might fall within a statutory requirement, to be removed as a tenant’s improvement at the end of the lease.

Attention should next be drawn to the statutory requirement itself.  In many cases it will only apply if certain facts exist (e.g. the tenant is required to be in occupation of the premises and hence will not apply when the lease has terminated).  Expert advice (e.g. from a fire officer) may be required before stating there is a breach of a particular statutory requirement.  It should also be remembered that building regulations generally only apply if works are required to be done (e.g. some disrepair has been identified).  There is rarely, if ever, a statutory requirement to comply with modern building regulations when works are not being conducted.

When drawing up the schedule of dilapidations, the covenant and the statute should be identified (stating that “the tenant should ascertain that they have met statutory requirements” - e.g. in relation to lighting - simply will not do) together with details of the alleged breach and the remedial works required.

Want to hear more?  Then why not contact Hatherleigh Training?