A schedule of condition is a formally drafted document that records the condition of a property or built asset at a specific point in time. At the beginning of a lease, one typically procures a schedule of conditions. The main purpose of the schedule is to provide a detailed inventory of the property’s condition, including any defects, repairs, or other issues that may be present. Depending on the skill and experience of the surveyor, the schedule will also include any potential lease-related or occupational issues that may become problematic at the end of a lease period.
Understanding the Importance of a Schedule of Conditions
A qualified surveyor typically prepares a Schedule of Condition to document a physical inspection of the property. The surveyor will make a detailed examination of the demised premises, including the structure, roof, walls, floors, windows, and doors, as well as any services, such as heating, plumbing, and electrical systems.
The surveyor will also document any identified defects or issues with photographs and notes.
Why Do Landlords Need a Schedule of Conditions?
A Schedule of Condition is a particularly important document for both landlords and tenants, as it establishes a clear record of the property’s condition at the start of the lease. In the event of a dilapidation claim, landlords can use this as evidence to claim repairs to the property at the end of the lease. On the other hand, a tenant can safeguard themselves against dilapidation claims by implementing a well-crafted schedule.
Landlords can use a Schedule of Conditions to compare the property’s condition at the start of the lease with its condition at the end of the lease. When used in tandem with a well-written lease, the schedule can be used to compare any changes in condition between the date at which the lease commenced and the date on which the tenant vacates.
Typically, a landlord would use a schedule of conditions to protect their asset when it is in good order at the start of the lease.
The Tenant’s Perspective on the Schedule of Conditions
For tenants, a Schedule of Condition can help to evidence the condition of a debentured asset to protect against dilapidation claims that may be unjustified. In some cases, a property will change hands during the tenancy (sold as a standing investment, for example), and it can often become difficult to defend a dilapidation claim without a schedule of conditions.
To demonstrate that any repairs needed at the end of the lease were either present at lease commencement or the result of normal wear and tear rather than damage or neglect by the tenant, use the schedule of condition as documented evidence.
Preparing a Schedule of Conditions
For the schedule to be useful, the lease document must incorporate it. The documented condition of the property can often be difficult to prove without a reference in the lease. It is also important to instruct a solicitor to revise lease clauses to reflect the schedule’s presence.
For example, if the Schedule evidences the Demised Premises as being in poor decorative order, then having an express decoration clause within the Lease to the effect of “The Tenant will decorate within the last 6 months of the term” can often dilute the benefit of the Schedule in the first place.
Legal Considerations For a Schedule of Conditions
It’s worth noting that the schedule of condition should not be confused with a Building Survey or a Homebuyer Report. Typically, buyers or sellers use these different types of surveys, which offer a more comprehensive assessment of a property’s condition. At Trinity Surveyors, we offer a wide range of Surveys though it is important to establish client requirements at an early stage. Additionally, the Schedule of Condition should always feature a fully detailed and comprehensive photographic schedule.
Final Thought:
Both landlords and tenants benefit from a Schedule of Condition because it offers a clear, agreed-upon record of the property’s condition at the beginning of the lease, which they can compare to the property’s condition at the end of the lease.
This ensures that tenants are held responsible for any damage or neglect of the property during the lease term and that landlords are not held responsible for repairs that are the result of normal wear and tear. On the other hand, it safeguards a tenant from bearing the cost of repairs, decoration, and/or reinstatement for which they bear no liability.