The difference between a full repairing lease, a flexible license and an internal repairing with maintenance charge
Looking for new office or industrial space but you’re unsure of what is involved and what type of contractual arrangement would suit you best?
Here we outline the three different options we offer depending on the unit and environment and what they mean.
Full Repairing Lease.
More often than not, a full repairing lease is the default for commercial properties and is generally listed as full repairing and insuring.
This means that when you take on the lease for a building you get most of the benefits as well as the liability just like you would if you were to own the building.
It essentially means you’re responsible for all the supplies to the building including utilities, broadband, business rates and you must comply with statutory obligations, e.g. periodic electric certifications, managing any asbestos that may be in the building, managing fire safety, roller door servicing etc.
It’s the occupier’s responsibility to keep the building in good repair throughout the tenancy, otherwise you may liable for a dilapidations claim at the end of your lease. This means that if any repairs are needed or anything needs putting back if you’ve made any alterations that are specific to your use, you must do them yourself prior to your occupation of the building ending. Alternatively, you can pay for the cost of the landlord doing these works. Generally on a full repairing lease, all elements of the building are included so you’d also be responsible for any structural issues to the building.
A full repairing and insuring lease is standard however, it’s not the only option.
Internal Repairing lease with Maintenance charge.
Where this differs from a full repairing lease is that it takes the pressure off tenants who may not want to have to worry about structural issues. These are often the areas of significant cost in keeping a building in good repair.
The occupiers are still liable for all of the internal upkeep, windows and doors and supplies to the building. By paying a small monthly maintenance fee, any structural issues will be taken care of by Sandyford Properties as part of that. It also means that there will be less to worry out when a tenant vacates a building as any dilapidations liability will generally be reduced.
The monthly maintenance fee means we undertake the repair liability on structural elements, external painting and the roof, etc.
This is a great option for smaller businesses and start ups who may not necessarily have the cash flow available for big expenses which can come with structural damage.
The units on the Trent Trading Park and our units on the Brown Lees Industrial Estate offer an Internal Repairing and Maintenance Lease option.
However, some businesses prefer to pay more to have all of the above covered in their monthly rent.
Our offices in Chester are available on a license agreement where quite often the business rates and utilities are covered in their monthly rent. The payment can also include building insurance. It also means we’re responsible for things such as ensuring fire risk assessments are in working order.
Businesses like this option as it means they can step right into their new commercial property and begin working.
These also often come as short-term leases, such as months rather than years. It suits many because it gives them more flexibility for upscaling and downsizing too. There will rarely be any liability at the end of a tenant’s occupation.
Flexibly licensed properties can be a steppingstone before moving to bigger premises or for some businesses, they can represent the way they wish to rent their property permanently.
If you’re interested in any of the leasing options for our commercial property in Stoke and Chester, contact us today to discuss what office, industrial and commercial units are available.
Stoke: 01782 281 202
Chester: 01244 681 221