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Schedule of Condition (for Attachment to a Lease)

Often when Landlord and Tenant parties are negotiating the terms for the granting of a commercial lease, the parties may require a “Schedule of Condition” to be prepared and attached to the lease.  The Schedule of Condition, once attached to the lease, will then form an agreed factual record of the state and condition of the property or buildings, etc., at the commencement of the lease term. 

Tenants entering into a lease without a Schedule of Condition may find themselves taking on extensive future dilapidations liabilities or even inheriting pre-existing dilapidations liabilities from the previous Tenant.  Often, Tenants seek to limit their future dilapidations liabilities by having a Schedule of Condition attached to the lease and by having their dilapidations related covenants and obligations limited so that in future, the Tenant is not required to put or keep the property in a better state of repair, condition, decorative order, etc., than evidenced by the Schedule.
 
On some occasions, Landlords may also wish a Schedule of Condition to be prepared and attached to the lease.  The Tenants covenants are then drafted so that the Tenants future liabilities of the property are in no worse condition than that evident in the Schedule.  Whatever the circumstances, a clear and detailed Schedule of Condition can be immensely beneficial to both Landlord and Tenant parties as it may help avoid future dilapidations disputes and arguments over the extent of any Landlord or Tenant dilapidations obligations.

 

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