Full Repairing and Insuring Lease Solicitors

Full repairing and insuring (FRI) leases are popular with landlords where the term is 5 years or more. They can apply to all types of premises and Landlords may often assert that such leases are standard and non-negotiable.

However, even if you are a tenant offered an FRI lease, you can still seek to negotiate its terms with a view to maximising your rights and minimising your potential liability.

We are experienced commercial property lawyers and can work with you whether you are a landlord or a tenant to navigate the provisions of an  FRI lease or any other type of commercial lease.

What does full repair and insure mean?

In short, an FRI lease places the responsibility on the tenant for repairs (whether to undertake them directly or to contribute to their cost through a service charge) and to contribute to the cost of the building insurance.  The landlord’s objective is never to have to make a payment in respect of its asset: to ensure that all possible costs in relation to its building is covered by the tenant or tenants.

Potential Issue with FRI Leases

A tenant offered an FRI lease should satisfy itself as to the condition of the premises, both internally and externally, at the time the lease is entered into. Failure to do so could result in an unexpected and unwelcome liability for repairs.  Unlike residential service charges, there are no statutory obligations on the landlord to be reasonable when operating a service charge in respect of commercial premises.

If there are issues with the cost of repairs, it may be difficult for a tenant to transfer its lease or exercise a break clause.

Options for tenants with FRI leases

Many landlords, especially institutional landlords, will insist on an FRI lease at first. However, they are aware of the commercial reality and our experienced lawyers can advise you on negotiations to limit your potential costs by reducing the extent of a repairing obligation or agreeing a cap on service charges – possibly in a side letter as landlords may not want your neighbouring tenants to become aware of any concession.

If you need a solicitor for a full repairing and insuring lease or any lease agreement, please call or email us for a discussion or quote. We have experience acting for and advising both landlords and tenants.

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