In the case of Dem-Master Demolition Limited v Healthcare Environmental Services Limited, the Outer House of the Court of Session considered an interesting question regarding the interpretation of a reference to a schedule of condition in a commercial lease. The tenant, Healthcare Environmental Services Limited, was obliged to maintain the property "in like condition as is evidenced on the Photographic Schedule…" However the schedule of condition was never prepared.
The court considered the question of what repairing standard should be imposed on the tenant at the termination of the lease. The landlord, Dem-Master Demolition Limited, argued that in the absence of the schedule of condition, the repairing obligation became unqualified, and the tenant was required to maintain the property in accordance with the “absolute” full repairing and insuring standard.
The court rejected the landlord’s argument and determined that the ordinary and natural meaning of the clause is that the tenant was obliged to restore the property to the condition that it was actually in at commencement of the lease. There was no requirement to improve the condition of the property beyond that standard. The omission to prepare the schedule of condition did not change the meaning of the repairing clause. Without the schedule of condition, both parties required to present other evidence to show the condition of the property at the date of entry.
The case serves as a useful reminder that landlords and tenants should ensure that schedules of condition are prepared timeously.
For more detailed commentary on the case please click here to read our briefing note. The briefing note originally appeared as an article by Laura Hay in the April 2017 edition of Property Law Bulletin, published by Thomson Reuters (Professional) UK Limited trading as W. Green.
Related News, Insights & Events
Outer House decision challenges artificial lease arrangements in non-domestic rates relief case
14/08/2025
The Outer House refused the judicial review of a decision by Highland Council to deny non-domestic rates relief to a property leased to a religious organisation for a nominal rent of £1.
Scottish Building Safety Levy Consultation: The clock is ticking
13/08/2025
The Scottish Government’s consultation on its proposed Scottish Building Safety Levy (SBSL) is coming to a close, with a deadline of 15 August for comments.
A guide to the ECCTA ID verification process
31/07/2025
A step-by-step guide to verify your identity online to comply with the identity verification (IDV) regime introduced by the Economic Crime and Corporate Transparency Act 2023 (ECCTA).
