Pre-Lease Survey

Technical Due Diligence

LEASES, TENANTS, SERVICE CHARGE

An advisory report provided to enable tenants to consider relevant issues and risks associated with a given property they are considering renting, both in terms of its physical condition and lease terms they are being asked to agree to.

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The Pre-Lease Survey

Pre-lease surveys are commissioned prior to the signing of a new lease and involve a physical survey of the property, as well as a review of any Heads of Terms or draft lease and set out to describe the tenant’s covenants (i.e. things they are agreeing to in signing the lease).

The survey aims to protect the tenant against unexpected costs, and ensures a tenant enters a lease having a thorough understanding of their responsibilities and liabilities that might impact them during their rental period, or that might cause them to face a large end-of-lease Dilapidations claim.

The survey will include inspections of structural elements of the property but should also provide detailed information about the property’s building services, including heating systems, electrics, and plumbing and drainage systems.

Subject to the findings of the report, the tenant may then seek to negotiate with the landlord to remove elements from their lease responsibility, or to seek an improvement in rental terms being agreed.

The Process

The document review will establish the extent of the property to be leased (e.g. including or excluding external elements, roofs, etc.) and the terms proposed for the tenant’s responsibilities (e.g. to repair and decorate the property).

It will also look at other factors such as service charge requirements (i.e. tenant contributions towards works to parts of the property outside of their direct responsibility, e.g. repairs to lifts in multi-let office buildings).

The Outcome

Through a comprehensive understanding of the property’s condition, alongside clarity on lease obligations, the tenant can accurately gauge how onerous or expensive the property may be to rent, beyond the headline terms.

In turn this enables them to make an informed decision about proceeding to lease and best enables reasoned negotiation on terms.