FRI Leases Explained: Why Tenants Need a Schedule of Condition
- FRI means full repairing and insuring: the tenant carries the cost of repairs and insurance for the whole property.
- The repairing obligation is open-ended, so you can be required to hand back the property in better condition than you took it.
- A Schedule of Condition annexed to the lease caps that obligation to the recorded starting state.
- Negotiate the condition record before you sign; you cannot add it afterwards.
Most commercial leases in the UK are "FRI", and the three letters carry more weight than a first-time tenant expects. A full repairing and insuring lease puts the cost of keeping the whole property in good order on you, whatever state it was in when you took it. A Schedule of Condition is how tenants keep that obligation honest.
What an FRI lease is
Under a full repairing and insuring lease, the tenant is responsible for repairing the property and for the cost of insuring it, usually by reimbursing the landlord's premium. The landlord receives "clear" rent, with the burden of repair and insurance passed to the tenant. It is the standard structure for a single let of a whole building.
How open-ended the repairing obligation is
This is the part that catches tenants out. A covenant to keep the property in "good and substantial repair" can require you to put right things that were never in good repair to begin with, and to yield up the property in that condition at the end. Without a record of the starting state, the obligation is effectively open-ended, and that is what a dilapidations claim is built on. RICS's guidance on dilapidations explains how these end-of-lease claims arise.
FRI, IRI and service charge
On a multi-let building you may instead see an internal repairing (IRI) lease, where the tenant repairs the inside of their unit and contributes to the repair of the structure and common parts through a service charge. The label matters: it changes exactly what you are responsible for, so read the repairing clause and the service charge provisions together.
Protect yourself before you sign
Get matched with RICS-qualified surveyors for a Schedule of Condition and compare no-obligation quotes.
How a Schedule of Condition caps it
A Schedule of Condition records the property's exact state at the start and is annexed to the lease, with the repairing covenant read subject to it. In effect, you agree to return the property in no worse condition than the record, rather than in some absolute "good repair" standard. That single change is what turns an open-ended liability into a defined one.
What to check in the lease
- The exact wording of the repairing covenant (keep in repair, put in repair, good and substantial repair).
- Any redecoration obligations and their frequency.
- Reinstatement: whether you must remove alterations and return the original layout.
- Whether a Schedule of Condition is properly referenced and annexed, and that it says what you think it says.
Have a surveyor and a solicitor review these together before you commit.
Getting protected before you sign
The time to act is before signing, because a Schedule of Condition cannot be created retrospectively. ComSurv matches you with RICS-qualified surveyors, and you can check regulation via RICS Find a Surveyor.
Sources & further reading
- RICS: Dilapidations in England and Wales (consumer guide) — how repairing obligations lead to lease-end claims
- Section 18, Landlord and Tenant Act 1927 — the statutory cap a Schedule of Condition works alongside
- RICS Find a Surveyor — RICS-regulated commercial surveyors
External links open in a new tab. ComSurv is a matching service, not a firm of surveyors, and is not affiliated with these organisations. This article is general information, not legal, surveying or valuation advice; take advice on your specific situation.
