Reading the Lease, Not Just the Survey
posted 13th July 2026
How a careful lease interpretation saved a profitable sale from collapsing over a structural survey
I was recently instructed on a matter involving the sale of a business operating from leasehold premises in Muswell Hill. The tenant had built up a genuinely profitable operation and had agreed a sale on the strength of that income. As part of their due diligence, the buyer commissioned a building survey, and it came back comprehensive, thorough, and alarming. It flagged a long list of potential liability areas connected to the perceived structural condition of the building, and understandably, it put the deal at risk of falling through.
I was called in by the seller to assess the position properly: what liability, if any, would actually transfer to an incoming tenant, and whether the survey's concerns held up once tested against the lease itself.
A Survey Tells You Condition. The Lease Tells You Who Pays
This is a distinction that gets missed surprisingly often. A building survey is very good at identifying defects and areas of concern in a property. What it generally doesn't do, and isn't intended to do, is establish who is contractually responsible for putting those defects right. That answer lives in the lease, not the survey report.
In this case, once I read through the lease in detail, a much clearer picture emerged. The structural issues the survey had raised, while present, were not as serious as the tone of the report suggested. More importantly, the repairing obligations in the lease meant that liability for structural expenditure would only fall on the tenant if and when the landlord actually carried out that work and sought to recover the cost. It wasn't an open-ended liability sitting with whoever held the lease. It was conditional, and the condition hadn't been triggered.
Turning a Frightening Report Into a Manageable Position
From there, I was able to go through the lease clause by clause and calculate specifically which elements of repair and expenditure the incoming tenant would realistically be responsible for. That figure turned out to be considerably more modest and much easier to understand than the impression left by the original survey.
Presenting that analysis alongside the survey gave the incoming tenant something they didn't have before: a clear, lease-based explanation of their actual exposure, rather than a long list of structural concerns with no context for who would be paying for them. A profitable business that had looked, on paper, like a liability minefield suddenly looked like exactly what it was, a sound commercial opportunity with a defined and manageable set of lease obligations.
Why This Matters Beyond This One Deal
Structural surveys are an essential part of due diligence, and I would never argue otherwise. But a survey read in isolation, without reference to the lease that actually governs liability, can make a transaction look far riskier than it is. Landlord and tenant repairing covenants, the mechanics of schedules of condition, and the timing of when liability actually crystallises are all things a survey alone cannot tell you.
Getting a chartered surveyor to interpret the lease alongside the physical findings is often the difference between a deal collapsing over a misunderstood report and a deal completing on terms both sides properly understand. In this instance, it meant a hardworking tenant's sale went ahead, and the buyer took on the business with realistic expectations rather than unnecessary alarm.
