Who is responsible for repairs in a rent to rent arrangement?
Who deals with repairs and who is ultimately responsible for repairs in a rent to rent arrangement is a complex area
Who deals with repairs and who is ultimately responsible for repairs in a rent to rent arrangement is a complex area and needs to be agreed and incorporated into the commercial rent to rent lease agreement. Ideally, the agreement should provide for the property to be returned to the landlord at the end of the term in its original tenantable state. This is particularly important should the rent to renter have made any alterations.
In order to avoid issues requiring resolution at the end of the tenancy over dilapidations and who pays for what, the landlord should arrange for a schedule of condition to be drawn up by an independent third party, ideally a chartered surveyor, and agreed by the parties and attached to the lease at the outset.
Residential landlords are subject to repairing obligations under Section 11 of the Landlord and Tenant Act 1985, and the only way these obligations can be avoided is if the property is let for seven years or more without a break clause in the agreement. Any letting over seven years means that the lease title and property details (floor plans) must be registered with the Land Registry. All this is unlikely in a rent to rent arrangement.
It is not possible to draw up a contract whereby the landlord avoids all responsibility for repairs. Under Section 11 the rent to renter is liable to the occupier and the landlord is liable to the rent to renter for repairs, although the landlord can make the rent to renter responsible for repairs and maintenance not covered by Section 11, and also the state of the property at the end of the term.
