Commercial Leases Essential Points for Tenants Ken Gerber

Commercial Leases Essential Points for Tenants Ken Gerber Mitchells Roberton, Solicitors, Glasgow

Repairs - Common Law Applies so far as not contracted out of Landlord to provide premises reasonably fit for purpose Landlord to repair Ordinary Repair v Extraordinary Repair Rei Interitus

Case law on repair - 1 Proudfoot v Hart – repair includes renewal of constituent part Lurcott v Wakely & Wheeler – external wall part of whole- repair can involve renewal House of Fraser v Prudential – tenant liable via service charge for extraordinary repair Taylor Woodrow v SRC – reasonableness test re landlord satisfaction Ravenseft v Davstone – repair cost in context even if major item Marfield v Sec of State for Environment – “all other parts” held to include roof and external walls

Case law on repair - 1 Proudfoot v Hart – repair includes renewal of constituent part Lurcott v Wakely & Wheeler – external wall part of whole- repair can involve renewal House of Fraser v Prudential – tenant liable via service charge for extraordinary repair Taylor Woodrow v SRC – reasonableness test re landlord satisfaction Ravenseft v Davstone – repair cost in context even if major item Marfield v Sec of State for Environment – “all other parts” held to include roof and external walls

Case law on repair - 2 Thorn EMI v Taylor Woodrow IE – imposing liability for extraordinary repairs Quick v Taff-Ely BC – “good repair” not same as “good condition” Napier v Ferrier – to put v to keep in good repair Lowe v Quayle Munro – reasonableness test re landlord’s satisfaction re repair Beatsons Building Supplies v Noble – solum included in premsies

Schedule of Condiiton Premises only? (or also common parts? ) Back letter / missive or annexe to lease Beware of landlord’s common law liability Deterioration

Dilapidations - 1 Remember common law rules – own goal by landlord Westbury v RBS – items at end of economic life Pacitti v Manganiello – personal bar by acceptance in good condition Sinclair v Caithness Flagstone – no specific implement after lease termination Coventry v British Gas – specific works to be done at termination

Dilapidations - 2 Damages = loss – (not a penny more or less) Grove Inv v Cape Building – value of works- only get actual loss @Sipp v Insight Travel- cost of works – get actual cost – and loss is immaterial

Insurance Definitions - beware! Excess Common law – rent abatement – no obligation to make good Noting of interest Waiver of subrogation Average

Uninsured Risks Do you need to provide for this? – extent of insured damage excusal for tenant Can’t v Won’t insure – definition of Uninsured Risks Rent abatement (common law contracted out of? ) Time for landlord to consider reinstating Consequences

Assignation & Sub-Letting Freedom at common law – invariably restricted Partial assignation usually prohibited- part sub-let often prohibited LBTT consequences on assignation Sub-let rent restriction

Service charge Definition of services – sweep up - appropriate services Compulsory v discretionary Apportioned cost –area / use / quantum Fix – cap – inflationary increase Exclusions – betterment – voids, insured and uninsured risk damage

Any questions? ? ? ? Ken Gerber Mitchells Roberton, Solicitors ksg@mitchells-roberton. co. uk