Reviewed and signed off by Lyman Marshall Surveyors, Director, Surveyor and RICS Registered Valuer at Lyman Marshall Chartered Surveyors. Published 22 October 2026 · Updated 22 October 2026
A schedule of condition is the cheapest piece of protection in a commercial lease, and it is almost always the one nobody thinks about until it is too late to get it. It is a dated written and photographic record of the state of the premises at the moment you take them on, attached to the lease and referred to in the repairing clause.
Without one, a full repairing and insuring lease can leave a tenant liable to hand back a building in better order than they received it. With one, the baseline is fixed and the argument at the end has somewhere to start from.
Quick answer: A schedule of condition is a dated written and photographic record of a commercial property’s condition, prepared before the lease completes and annexed to it. Where the repairing clause refers to it, it limits the tenant’s repairing obligation to the condition recorded, so the tenant need not return the premises in better condition than they took them.
Why a repairing clause is the risk
Most commercial leases in this country are full repairing and insuring. In plain terms, the tenant takes on the cost of keeping the building in repair for the length of the term, regardless of how worn it was on day one.
That is not unreasonable in itself. It becomes unreasonable when the premises were tired to begin with, because “keep in repair” has repeatedly been read as including “put into repair” where the building was not in repair when the lease started.
So a tenant signing a fifteen-year lease on a unit with a twenty-year-old flat roof has, without noticing, agreed to buy the landlord a new roof. The rent was negotiated. That was not.
What the schedule of condition actually does
It does one thing, and it does it well: it fixes the baseline. Every element of the property is described as found, and photographed as found, on a stated date before the lease begins.
The obligation is then written by reference to that record. The wording varies, but the effect a tenant wants is that they are not required to put or keep the premises in any better condition than is evidenced by the annexed schedule.
It matters at the end, not the beginning. When the lease ends, the landlord is entitled to look at the state of the building and claim for breaches of the repairing covenant. The schedule is what stops that claim reaching back to defects that were already there. And there is a statutory ceiling on such claims in any event: damages for breach of a repairing covenant cannot exceed the amount by which the value of the landlord’s reversion is diminished by the breach. That cap is useful, but it is an argument about figures after the event. The schedule is what avoids the argument.
The clause matters more than the document
This is where most tenants lose. They commission a schedule, receive a well-produced report, feel protected, and sign a lease that mentions it only in passing.
A schedule of condition is worth exactly what the lease says it is worth. If the repairing covenant does not cross-refer to it, or refers to it only as evidence of appearance rather than condition, the document sits in the file doing nothing.
Get the surveyor and the solicitor talking to each other before the lease is engrossed. The surveyor knows which defects the record needs to carry weight for; the solicitor knows how to word the limitation. That conversation costs a phone call and is the difference between protection and paperwork. The RICS Code for leasing business premises exists precisely to improve the quality and fairness of lease negotiations and to promote comprehensive heads of terms, which is the stage where this belongs.
What a good record contains
- Dated, captioned photographs of every elevation, roof area where safely visible, internal space, and each recorded defect.
- Written description alongside the images — a photograph shows a stain; only words explain that the stain is active water ingress at a specific junction.
- Element-by-element coverage — roof coverings, rainwater goods, walls, windows and doors, floors, ceilings, shopfront or loading doors, and yards or parking within the demise.
- Services as seen — heating, lighting, electrical distribution, drainage and their apparent condition, with the limits of the inspection stated.
- A clear statement of what was not inspected — concealed areas, locked rooms, anything beyond safe access.
- An accurate plan of the demise, so there is no later argument about whether a defect was even inside the area you leased.
That last item sounds administrative. It is not. A surprising share of end-of-lease disputes turn on where the demise stopped, particularly in multi-let industrial estates and above-shop arrangements.
Timing: it only works before completion
The record has to describe the premises as you take them. Once you have completed and started fitting out, you have changed the thing you were supposed to be recording, and the value of the exercise falls away quickly.
The right sequence is straightforward. Heads of terms agreed, schedule commissioned, inspection carried out while the unit is empty, draft circulated to both sides, wording agreed in the lease, schedule annexed, lease completed.
Where a landlord will not accept a limitation, that is worth knowing before you sign rather than after. It is a negotiating point like any other, and on a tired building it is often the most valuable one available to a tenant.
What it does not protect you from
It is a limitation, not an exemption, and tenants sometimes read it as more than it is.
- Reinstatement of your own alterations. If you put in a mezzanine, partitions or a shopfront, taking them out at the end is usually a separate obligation.
- Statutory compliance. Fire safety, electrical and other regulatory duties attach to occupation and are not limited by a photograph of how things looked in year one.
- Decoration covenants. An obligation to redecorate in the final year of the term commonly survives, whatever the schedule says.
- Anything outside the demise. Service charge liability for the wider estate is a different mechanism entirely.
- Damage you cause. The baseline protects you from inheriting wear, not from creating it.
Landlords should want one too
It is presented as a tenant’s tool, and it is mostly used as one, but a landlord letting a well-maintained building has the mirror-image interest. A record showing the unit handed over in good order is what makes a later claim straightforward rather than contested.
Left to the end of the lease, both sides are reconstructing history from memory and marketing photographs. Under the Dilapidations Protocol a landlord’s schedule should generally be served within 56 days of the tenancy ending, which is not long to assemble evidence about a building you last saw properly a decade earlier.
An agreed baseline shortens that exercise for everybody. It is one of the few documents in commercial property that genuinely reduces work on both sides of the table.
Where this sits in the wider survey picture
A schedule of condition is a record, not an assessment. It says what is there; it does not tell you whether the building is a sensible thing to lease, what the defects will cost to live with, or how long the roof has left.
If you want that judgement, it belongs in a survey of the premises, and the two are often commissioned together on the same visit. We have set out what that involves in our guide to what a commercial property survey includes, and in our overview of commercial property surveys for occupiers in Lincoln. Leaseholders of flats face a related version of the same question, which we cover in our guide on whether you need a survey for a leasehold flat.
Taking on a commercial lease?
We prepare schedules of condition and commercial property surveys for tenants and landlords across Lincoln, Lincolnshire, Nottinghamshire and the surrounding counties. If you have heads of terms, there is still time to get this right.
How much does a schedule of condition cost?
It depends on the size, complexity and access arrangements of the premises rather than on a fixed scale, so it is quoted per property once we know what is involved. A small retail unit is a very different exercise from a multi-bay industrial building. We are happy to give a figure once we have seen the details.
When should a schedule of condition be prepared?
Before the lease completes, and ideally before any fit-out begins. The document is only useful if it records the premises in the state you are actually taking them on, and the repairing clause needs to be worded to refer to it before the lease is signed.
Does a schedule of condition remove all repairing liability?
No. It limits the repairing obligation to the condition recorded, so you are not required to improve on what you inherited. Reinstatement of your own alterations, statutory compliance duties, decoration covenants and damage you cause during the term normally remain your responsibility.
Who prepares a schedule of condition?
A building surveyor, instructed by whichever party wants the protection, though the document is disclosed to both sides and annexed to the lease. Where the record is likely to be relied on later, having it prepared by a chartered surveyor makes it considerably harder to dismiss.
Can a schedule of condition be added after the lease has started?
It can be prepared later, but its value drops sharply. Once you are in occupation the premises have changed, and unless the landlord agrees to vary the lease to refer to the new document, it has no contractual effect on the repairing obligation.
