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The importance of a Schedule of Condition

12th November 2013

The importance of a Schedule of Condition

When acquiring office space, most tenant’s solicitors feel a lot more comfortable if a Schedule of Condition has been carried out. A schedule of condition is a photographic report which outlines in detail the state of the office space being acquired and is referred to when the tenant is reinstating the office at the end of the lease back in to the condition that they took it in. If a schedule of condition is not carried out it is possible that tenants can be stung with onerous dilapidation liabilities and put the space into a better condition than they found it. 

Whether a Schedule of Condition is required will depend mainly on whether the space has been newly refurbished or not. If an office has been refurbished into a brand new cat A condition then generally a schedule is not required. The reason for this is that a new refurbished space is to be taken on a new lease direct from the landlord and the reinstatement liabilities for the tenant will to be to put the space back in to a refurbished cat A condition, therefore a Schedule is not needed. However some solicitors will push for one to be undertake regardless.

When a space is taken in second hand condition then a Schedule of Condition should always be included. This is something that Morgan Pryce would always agree up front in the Heads of Terms as it can prove difficult to get one once the space is under offer. Morgan Pryce are about to complete an acquisition on behalf of a client of an office on Cheapside. It was vital that a Schedule of Condition as although the space was in good condition there was still evidence of wear and tear. However more importantly the cline was inheriting some of the existing fit out including partitioning and a kitchenette.  If this was not documented then some landlords may try and get a tenant to remove the fit out at the end of the lease which would not be fair. 

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.

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