However, there is a potential trap, waiting for almost every tenant. Before you sign on the dotted line for any lease, you need to understand what the term ‘dilapidations’ means. 

Commercial premises are let on a ‘Full Insuring and Repairing’ basis – and that means exactly what it says. At its most basic (and expensive) this means that for a shop, shed, warehouse or office, the tenant must pay all the expenses of maintenance, repair - and even rebuilding if the property collapses and insurance doesn’t cover the loss. And, at the end of the lease period when you hand back the keys, you must return the unit in ‘good and tenantable order’. This means in first-class condition.

And here’s the kicker – even if the premises were run down when you took over, the lease you sign will almost certainly dictate that you have to do the unit up and hand it back pristine. That includes painting. Even if everything else is in good nick – brickwork, fittings, equipment, floors, roof – there is a provision in the lease that you must repaint the interior and exterior – every 3 or 5 years, to a standard acceptable to the landlord. This aspect of dilapidations is understandable. Just as in your own home paintwork fades and gets marked and worn, a commercial unit gets scruffy from busy daily occupancy by workers, customers, and/or management. 

Why do I have to repaint every 3 to 5 years?

Some decoration is not just aesthetic, it serves the purpose of protecting the underlying material from further damage. So while we tend to think of walls as the main surface that needs painting in our homes, in a commercial context this could be exposed timber, floors, metal supports, ceilings, and other structural elements that are inside or outside the property that need recoating, if not painting.

The landlord will include what they and their solicitor consider to be a reasonable timeframe for upkeep and maintenance of the property - not simply to be difficult but because this will ensure that the property is well maintained and to avoid major structural work at a later stage. In theory, regular maintenance and early intervention will result in an easier and cheaper job for the tenant.

As to what needs to be decorated, it is usually all ‘previously decorated surfaces’. So when you’re considering which property to rent for your business, it’s worth keeping this in mind. A vaulted ceiling may be appealing to your customers but it could be costly to repaint if you need to hire scaffolding or a cherry picker to get the work done.

Can I do the work myself?

In theory yes, but if your DIY skills are not up to scratch, your landlord may not accept the standard of decoration and request you hire the expertise of an experienced tradesperson. In very specific circumstances, the lease may require very specific finishes to be adhered to - especially in the case of listed buildings or buildings of a historic nature. This may require you to hire specially skilled people to undertake the work needed.

Most leases include a clause that reserves the right for the landlord to inspect the property. If works haven’t been completed in line with the terms of the lease, the landlord may serve a notice requiring the work to be completed within a reasonable time frame or may carry out the works and recover the cost back from the tenant.

Is painting and redecoration an issue in newly built properties?

A further point to note about redecoration is for new build properties. If you are the first tenant in a building, if any issues occur as a result of a defect in the original construction and cause damage to any decorated surfaces, it may be appropriate to ensure that this is excluded from your repairing obligation. 

What steps should I take before signing a commercial lease?

If you’ve already signed the lease, you are obliged to carry out the repairs and painting. It’s always worth consulting a solicitor who can check your lease and identify if there is any wiggle room, but it’s pretty unlikely.  

However, before committing to the lease, your solicitor can revise the wording, and it may be possible to soften the blows by editing dilapidations and repairs clauses. This is not certain but it is always worth negotiating.

Again, before you sign, it can be extremely beneficial to get a professional inspection and report on the unit. A surveyor can point out deficits that will be costly to repair and you can use this to get a better deal and/or the landlord to do repairs in advance.

Thirdly, it might be helpful to instruct a surveyor to produce a Schedule of Condition report. This is a report based on photographic and written evidence of poorly maintained areas and is attached to the lease - limiting your financial repair obligations to return the premises in a standard no better than demonstrated in the Schedule.

Unfortunately, in most cases, it is too late to consult a solicitor, because you receive a repair bill in the thousands once you have innocently handed back the keys to your rental unit.