REPAIRS AND NEW LEASES

In the case of new leases, repairs need special attention. The lease may well be ‘fully repairing’, which means that once you sign it, the responsibility for all repairs at the pub will be yours. This may include a requirement for you to repair any faults or damage that you inherit when you take on the pub.

Prior to signing a lease with these terms, you should obtain your own independent assessment of the premises, via a structural survey report and any additional reports (eg electrical tests, etc) that your surveyor may recommend. You need to discuss the findings with the Business Development Manager/Area Manager and make sure that any verbal assurances are put in writing before you sign the lease. Where there are significant repair issues, the following options could apply:

• Option 1: The brewery or pub company agrees to undertake all repairs over an agreed timescale.
• Option 2: You agree to make repairs for a reduction in rent or at the quoted rent.
• Option 3: Your responsibility for these repairs is removed and agreed in writing (and the repairs are not completed).

Option 1 is the best solution for the new lessee, as the cost will be borne by the brewery or pub company. How good option 2 is for a new lessee will depend on the cost of the repairs versus the reduction in rent. There is also the inconvenience factor of having to organise the repairs yourself. (However, you may be told that the rent quoted was set to reflect the current state of the premises, and therefore no rent concession is available.) Option 3, while removing liability for the repairs, leaves them undone, which is likely to cause a problem at a later stage if the issues worsen. It can also cause problems when the new lessee decides to sell their lease, affecting the price and leaving a subsequent lessee responsible for repairs (as the immunity from repairing these may not be applicable to them).