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Commercial Property Lease on FRI
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hen12y
Posts: 17 Forumite
Afternoon! Just wondering if anyone here is a small business owner and has a premiss which they lease FRI (Full repair and Insure).
My wife is looking to expand her at home business and is looking on taking on a shop. We've done our research and have identified a good one, but the landlord is only offering it FRI, ie. tenant 100% responsible for the building, the structure, the roof etc. He is happy for schedule of condition and dilapidation though, so that anything which is wrong now will not be the tenants responsibility to put right. He also has a good insurance policy which covers pretty much all risks to the property.
Our concerns:
As a timber framed grade 2 listed building any repairs are going to be huge! But the schedule of condition is going to be worded by our solicitor that if any future problems are caused by any issues currently identified, then they will be exempt from the dilapidations also.
On a FRI the tenant is responsible for everything. one of the plastered walls has minor damp damage, if all the plaster falls off, the schedule of condition will protect us from having to repair it upon hand over, but it is not the landlords responsibility either. Does this mean that while we don't have to fix it neither does the landlord? because we cant have a half broken wall on her shop floor! Same for the wooden floor, if one of the beams goes which is on the schedule we wont be liable, but neither will the landlord and we kind of need the floor! Where does insurance come in and how do we make sure this sort of thing is covered?
The family home is all in my name (mortgage/land registry), the lease for the shop will be all in my wifes name, so if something does go awfully wrong we are protected, even if my wife is not.
if anyone has any experiance with this sort of thing, sharing your experiences or thoughts would be really helpful to us thanks!
My wife is looking to expand her at home business and is looking on taking on a shop. We've done our research and have identified a good one, but the landlord is only offering it FRI, ie. tenant 100% responsible for the building, the structure, the roof etc. He is happy for schedule of condition and dilapidation though, so that anything which is wrong now will not be the tenants responsibility to put right. He also has a good insurance policy which covers pretty much all risks to the property.
Our concerns:
As a timber framed grade 2 listed building any repairs are going to be huge! But the schedule of condition is going to be worded by our solicitor that if any future problems are caused by any issues currently identified, then they will be exempt from the dilapidations also.
On a FRI the tenant is responsible for everything. one of the plastered walls has minor damp damage, if all the plaster falls off, the schedule of condition will protect us from having to repair it upon hand over, but it is not the landlords responsibility either. Does this mean that while we don't have to fix it neither does the landlord? because we cant have a half broken wall on her shop floor! Same for the wooden floor, if one of the beams goes which is on the schedule we wont be liable, but neither will the landlord and we kind of need the floor! Where does insurance come in and how do we make sure this sort of thing is covered?
The family home is all in my name (mortgage/land registry), the lease for the shop will be all in my wifes name, so if something does go awfully wrong we are protected, even if my wife is not.
if anyone has any experiance with this sort of thing, sharing your experiences or thoughts would be really helpful to us thanks!
0
Comments
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I know nothing about "FRI" but it seems highly unusual to me, and should therefore be reflected in a much lower lease cost. Personally, I would never want to be responsible for repairs to a grade 2 listed building.0
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as residential landlords ourself I know exactly what you mean! however 90%+ of commercial leases are on FRI0
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The rent is set accordingly. You should employ a chartered building surveyor to assess the state of repair and prepare a schedule of condition at the commencement of the tenancy so that when you leave or assign, the landlord cannot insist on you restoring it to condition not reflected in that schedule ( subject to the wording of the repairing covenant of course)Stop! Think. Read the small print. Trust nothing and assume that it is your responsibility. That way it rarely goes wrong.
Actively hunting down the person who invented the imaginary tenure, "share freehold"; if you can show me one I will produce my daughter's unicorn0
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