What is a Full Repairing and Insuring Lease?

Aug 8, 2019

A full repairing and insuring lease (“FRI Lease”) is a lease in which the tenant takes on all of the costs for repairs and insurance for the property being leased from the landlord. This article focuses on the repairing elements of an FRI lease. The requirement for repair of the premises applies even if the property is in a poor state of repair to begin with!

That statement can be a surprise to many people. The common misconception is that a tenant only has to give the property back in the same condition in which they took it.  This is not the case.  By entering into an FRI lease the tenant takes on complete responsibility for repairs, even if:

  • that tenant was not responsible for the state of repair of the premises from the outset of the lease, or
  • if the disrepair already existed when the lease was granted.

If there are any doubts as to the condition of the property, a tenant should therefore obtain an independent survey on the property.  Such a survey report can act as a bargaining tool for the tenant in the negotiation of the lease terms, or it can be used as proof of the state and condition the property at the start of the term.  This can create a “Schedule of Condition” to be attached to the lease. The better the schedule, the better the potential safeguard against future dilapidation claims from the landlord.

The definition given to “the property” in a lease is also crucial because this will detail the extent of the property that a tenant is responsible for. For instance, is the lease an internal only demise or does the tenant have responsibility for the whole structure?  If the latter applies, the condition of the roof may be a big concern, for example. This is especially relevant to a lease of an old industrial building. It such situations it may be possible to negotiate with the landlord for the roof to be excluded from the repairing obligation in the lease and thereby saving that future cost to the tenant.

Complying with the repairing obligations within a FRI lease on an ongoing basis is one of the biggest liabilities for any tenant and this liability doesn’t end just because the lease does.

As the lease approaches its end or even after the term has ended, a landlord will inspect a property to serve a terminal schedule of dilapidations on the tenant.

This schedule lists all items of disrepair in the property and will quantify the cost of carrying out the repairs, including a calculation of lost rent for the period during which the repairs are carried out. The landlord’s intention will be to agree a payment in lieu of repairs and it is not unusual for this figure to be very, very high!  At this stage, professional advice is advised and clearly, the more you considered your obligations at the beginning of your lease, the better placed you will be when it comes to discussing the schedule of dilapidations. 

For specific legal advice on commercial lease and any other Landlord and Tenant issues, contact Daniel York in our Real Estate team, or email your query, call us on 01276 686222 or visit our website.

This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.

Sign up

Enter your email address for legal updates on Property Law.

Please see our privacy policy regarding use of your data.


Contact us

Support for you, your family and your business. Get in touch today by phone or enquire online. 

Tel: +44 (0) 1276 686 222

Top read insights in 2019

Commercial Law

Material Breach of Contract

What is a ‘material’ breach of contract by a party to a commercial contract? This is a critical issue regularly considered by the courts. What constitutes a material breach and what are the remedies?

Property Law

Purchasing Land - Option Agreements

A developer and a landowner can enter into an Option Agreement. What are the strategies that can be employed by both landowners and developers to assist in such land deals?

Private Client

What are the Tax Implications of a Civil Partnership?

Is there a significant tax saving to be made by a couple who are married or in a civil partnership that cohabitating couples simply don’t qualify for?  

Private Client

Restrictive Covenants – The Price of Modification

Having identified that your land is burdened by a restrictive covenant and for the purposes of this article the covenant in question will be that only one residential building can be erected on the land. What do you do next?

Awards / Accreditations

Legal 500 Lawyers
Accredited Conveyancing Lawyers
Accredited Immigration & Asylum Lawyers

Andrew Smith is SFE accredited*

London

Amadeus House, 27b Floral Street, London, WC2E 9DP.
+44 (0) 203 755 0557

Camberley

Building 9, Riverside Way, Watchmoor Park, Camberley, Surrey. GU15 3YL.
+44 (0)1276 686 222

Wokingham

27 Broad Street, Wokingham, Berkshire. RG40 1AU.
+44 (0)118 977 4045

info@herrington-carmichael.com

© 2019 Herrington Carmichael LLP. Registered in England and Wales company number OC322293.

Herrington Carmichael LLP is authorised and regulated by the Solicitors Regulation Authority.

Privacy   |   Terms and Conditions   |   Cookies   |   Client Feedback