What is a Schedule of Condition?
A Schedule of Condition is a detailed photographic and written record of a commercial property's condition at a specific point in time—typically at the commencement of a commercial lease. Prepared by a qualified RICS surveyor, this document serves as crucial evidence protecting tenants from unreasonable dilapidations claims when their lease ends.
The schedule captures every aspect of the property's existing condition through comprehensive photographs, detailed descriptions, and professional observations. It documents existing defects, wear and tear, decorative standards, and the overall state of repair across all areas of the premises.
Without a Schedule of Condition, you may be liable for repairing defects that existed before you even moved in. Dilapidations claims at lease end can exceed £100,000 for larger commercial properties.
Why a Schedule of Condition is Critical for Commercial Tenants
Commercial lease agreements typically include Full Repairing and Insuring (FRI) clauses, making tenants responsible for maintaining and repairing the property to a certain standard. Without a Schedule of Condition, this standard is often interpreted as "perfect condition," regardless of the property's actual state when you moved in.
The Dilapidations Risk
At lease end, landlords can serve a terminal schedule of dilapidations—a list of required repairs and associated costs. Without a Schedule of Condition as baseline evidence, you're vulnerable to claims for:
- Pre-existing structural defects
- Worn decorations that were already tired when you moved in
- Mechanical and electrical issues that predate your tenancy
- Roof problems that weren't your responsibility
- External areas already in poor condition
A retail tenant in Manchester faced a £85,000 dilapidations claim for roof repairs. Their Schedule of Condition proved the roof was already defective at lease commencement, reducing their liability to £3,500—a saving of over £81,000.
Legal Protection
A properly prepared Schedule of Condition provides robust legal protection by:
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Establishing baseline evidence: Irrefutable proof of the property's condition at lease commencement
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Limiting repair obligations: Defines you're only responsible for condition beyond what was documented
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Reducing disputes: Clear evidence minimizes disagreements about dilapidations
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Supporting negotiations: Provides leverage when discussing lease end obligations
What a Schedule of Condition Includes
A professional Schedule of Condition is far more comprehensive than a simple photographic record. It includes:
1. Detailed Photographic Evidence
- Comprehensive photographs of every room and area
- Close-up images of existing defects and damage
- External elevations from multiple angles
- Roof condition (where safely accessible)
- Car parks, loading areas, and external spaces
- Mechanical and electrical installations
2. Written Descriptions
- Room-by-room condition narratives
- Specific descriptions of defects and wear
- Materials and finishes documentation
- Age and condition assessments
- Historical alterations or repairs
3. Floor Plans and Location References
- Annotated floor plans showing photograph locations
- Reference numbering system linking photos to descriptions
- Clear identification of all documented areas
4. Professional Observations
- Surveyor's expert commentary on condition
- Identification of significant defects
- Age and life expectancy assessments
- Recommendations for tenant protection clauses
The Schedule of Condition Preparation Process
Step 1: Early Instruction
Instruct a RICS surveyor as soon as possible during lease negotiations—ideally before exchanging contracts. The schedule must be prepared before you take occupation.
Step 2: Site Inspection
The surveyor conducts a comprehensive inspection of the property, typically taking 2-4 hours depending on size. They'll photograph and document:
- All internal spaces
- External elevations
- Roof areas (where accessible)
- Mechanical and electrical systems
- Shared areas and external spaces
Step 3: Report Compilation
The surveyor prepares a detailed report combining photographs, written descriptions, and professional observations. This process usually takes 5-7 working days.
Step 4: Lease Integration
The completed Schedule of Condition is attached to your lease as a formal document, limiting your repairing obligations to maintaining the property in no worse condition than documented.
The schedule must be prepared BEFORE you take occupation. Once you've moved in and begun trading, it's too late—you'll be assumed to have accepted the property in perfect condition.
Potential Cost Savings: Real Examples
The cost of a Schedule of Condition (typically £800-£2,500) is negligible compared to the potential savings:
Case Study 1: Office Space, Birmingham
- Property: 3,500 sq ft office space
- Schedule Cost: £1,200
- Initial Dilapidations Claim: £42,000
- Final Settlement with Schedule: £8,500
- Saving: £33,500
Case Study 2: Retail Unit, Leeds
- Property: High street retail premises
- Schedule Cost: £950
- Initial Dilapidations Claim: £28,000
- Final Settlement with Schedule: £4,200
- Saving: £23,800
Case Study 3: Industrial Unit, Manchester
- Property: 12,000 sq ft warehouse
- Schedule Cost: £2,200
- Initial Dilapidations Claim: £96,000
- Final Settlement with Schedule: £18,000
- Saving: £78,000
Protect Your Business with a Professional Schedule of Condition
Don't risk tens of thousands in unnecessary dilapidations costs. Our RICS surveyors prepare comprehensive schedules of condition to protect your interests.
Get Your Quote TodayCommon Mistakes Tenants Make
1. Not Commissioning a Schedule at All
The most costly mistake. Many tenants assume the property is in reasonable condition and don't bother with a schedule, only to face devastating dilapidations claims years later.
2. Using Non-Professional Photography
Some tenants take their own photos thinking this will suffice. However, without professional methodology, proper documentation, and expert commentary, these photos have limited legal weight.
3. Instructing After Taking Occupation
Once you've moved in and begun using the premises, it's too late. Landlords will argue that any documented defects occurred during your tenancy.
4. Inadequate Coverage
Rushed or incomplete schedules that miss critical areas or defects provide incomplete protection. Professional surveyors know what to look for and how to document it properly.
5. Not Integrating with the Lease
The schedule must be formally attached to and referenced in your lease agreement. A standalone document has limited legal standing.
When Should You Commission a Schedule of Condition?
Essential Scenarios:
- New Commercial Lease: Any time you're taking on a new commercial property
- Lease Renewal: When extending or renewing existing leases
- FRI Leases: Absolutely essential for Full Repairing and Insuring leases
- Older Buildings: Critical for properties with existing wear, defects, or age-related issues
- Long Leases: Longer lease terms increase dilapidations risk
- Large Properties: Higher-value properties mean higher potential dilapidations exposure
Instruct your surveyor during heads of terms negotiations—before legal completion. You need the schedule prepared before taking occupation but after agreeing lease terms.
Frequently Asked Questions
Costs typically range from £800 for small retail units to £3,000+ for large warehouses or complex multi-unit buildings. The investment is minimal compared to potential dilapidations savings of tens of thousands of pounds.
While you can take photos yourself, a DIY schedule lacks the professional credibility, comprehensive methodology, and expert observations that give a RICS surveyor's schedule legal weight. Landlords and their surveyors will challenge amateur schedules.
Some landlords may resist, as it limits their ability to claim for pre-existing defects. However, it's a reasonable and professional approach that simply ensures fairness. Most professional landlords accept properly prepared schedules as part of standard commercial practice.
A building survey identifies defects and provides advice on repairs and maintenance for the buyer's benefit. A Schedule of Condition is a factual record without advice, designed to protect tenants from dilapidations claims. You might want both: a survey to understand the property, and a schedule for lease protection.
Schedules typically aren't updated during the lease term, as they're designed to record the property's condition at a specific moment—lease commencement. However, if you make significant improvements or alterations, you might commission supplementary documentation to protect your investment.
When properly attached to and referenced in your lease agreement, a professional Schedule of Condition forms part of the legal contract and is binding on both parties. It provides strong evidential support if dilapidations disputes arise at lease end.
Don't Risk Thousands in Dilapidations Costs
Contact our team today for expert Schedule of Condition services that protect your business interests throughout your lease term.
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