Q&A - What is meant by a full repairing and insuring lease?

01/10/2014

Q: I have been running a small business from home, repairing and building handmade bicycles. The business is going well now and now I want to move into commercial premises where I can have a ‘shop window’ as well as a workshop. Last week I found premises in an ideal location, on the ground floor of a terrace of properties. The landlord says he wants a full repairing and insuring lease. As I have never rented commercial premises before I was not sure what he meant by this. Please can you explain?

A: A full repairing and insuring lease means that you will be responsible for the repair of all parts of the property of which you are the tenant. So if you are leasing the ground floor shop that will usually mean you are responsible for the repair of the floor, the shop front, the windows, the doors and the internal walls. If the landlord is suggesting that you take a lease of the whole property then you could end up being responsible for everything from the roof to the foundations and all that lies between.

The lease needs to clearly set out exactly which parts of the property you are leasing and you may want to agree that you have only to return the property in the same state in which you took it over, by including a schedule of condition in the lease. This will ensure you are not held responsible for any existing disrepair. The landlord will insure the building and charge you the cost of the insurance in addition to the rent.

It is important to take advice at an early stage before entering into a lease of business premises. Business leases are complex and potentially onerous agreements and the right advice early on can save money later on,

Iain Hall

Iain Hall

Senior Solicitor

Part of our Property team in Wrexham

Hannah Fynn

Hannah Fynn

Solicitor

Part of our Commercial and Residential Property team in Oswestry