Review the Lease
You should review your Lease as a landlord to check what you are allowed to do if the Tenant’s self-help remedies are exhausted, or the Tenant isn’t complying with the Lease. A good place to start would be to check the repairing covenants, forfeiture provisions, service charge provisions, as well as any schedule of conditions.
You could also look to pursue any guarantors, especially if you intend to perform the works at your cost and the Tenant is unable to cover the costs of this.
A repair notice can be served upon a Tenant, requiring the Tenant to undertake works within around two months. If the Tenant fails to undertake the works you may perform the works. This cost will then be due from the Tenant as a debt. This should also avoid any arguments/challenges around the reasonableness of the costs because the sum is due as a debt and not damages. To do this, the Lease must explicitly contain a repair notice provision.
Serve notice to terminate the lease
A breach of repairing covenants by the Tenant is likely to give rise to the right to serve a forfeiture notice in accordance with section 146 Law of Property Act 1925. This puts the Tenant on notice of the disrepair, giving the Tenant a reasonable period to undertake works. If the Tenant fails to undertake the works you may terminate the lease. If the works are performed by the Tenant in accordance with the lease, the right to terminate will fall away.
- Consider your ability to recover costs
It is common for commercial leases to provide for a right for the Landlord to recover the costs of serving any repair notice or section 146 notice, as well as a schedule of dilapidations. You could also check for any indemnity clauses you can rely upon for claims or actions against the Tenant in relation to the works.
- Put all necessary agreements in place for any Tenant works
If the Tenant does carry out the works or wants to use the opportunity to do other things to the property, that should be properly recorded. All necessary consents should be obtained, such as planning/building, superior landlord, and licences for works/alterations.
If you want to speak to an expert on commercial leases then please call Nick Attwell on 01473 229200 or email Nick at firstname.lastname@example.org
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