The Importance of a Schedule of Condition at Lease Commencement for Occupiers

When signing a commercial lease, many occupiers focus on rent, lease term, and fit-out potential—but often overlook a key protective document: the Schedule of Condition (SoC).

A SoC is a photographic and written record of the property’s condition at the start of the lease. While optional, it can be one of the most valuable tools in protecting tenants from future disputes and unexpected costs.

Why it Matters

Without a Schedule of Condition, tenants are often liable to put and keep the property in better repair and condition than it was in at the outset. This can result in significant expenditure both during and at the end of the lease term.

By contrast, an SoC can help occupiers by accurately recording the condition of the property at the commencement of lease and by diluting the repairing and potentially decorative covenants to putting and keeping the property in ‘no better’ or ‘no worse’ condition than evidenced by the SoC at the lease commencement.

Costs

Typically, the cost saving a well prepared SoC will provide in terms of diluting your potential liabilities will significantly outweigh the professional fees to inspect and prepare the SoC. Therefore, pay a little now to save a lot later.

Final Thoughts

If you are an occupier thinking of taking on a commercial lease, speak to our Building Surveying team and for a modest upfront investment you can protect your position, reduce your potential liabilities and minimise your chances of a challenging dispute at lease end.

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