For commercial tenants and landlords
FRI Lease: Full Repairing and Insuring Explained
Sviatoslav JerdetchiiCEO & Founder of Craftex. Updated , 7 min read
The short answer
A full repairing and insuring lease, or FRI lease, makes the tenant pay for repairing the premises and for insuring them. In a multi-let building the tenant pays its share through the service charge.
- Read the repair clause: 'keep in repair' can cover the building's existing defects, not just new damage.
- A schedule of condition can cap the repair obligation at the state the premises were in when let.
- At lease end the repair, decoration and reinstatement clauses become the landlord's schedule of dilapidations.
- Price the likely lease-end works before you sign, not after the keys go back.
A full repairing and insuring lease, or FRI lease, makes the tenant responsible for the cost of repairing the premises and of insuring them. It is a common form for offices, shops and industrial units let in England and Wales.
In a whole building the tenant does the repairs itself. In a multi-let building the landlord repairs the shared parts and recovers the cost through the service charge. The insurance premium usually comes back to the landlord as a separate charge.
This guide comes from the team that carries out dilapidation works in London, so it reads the lease from the builder's side. We are not solicitors: your solicitor advises on the wording.
Holding a draft lease, or one ending soon? Get a free schedule costing of the repair and reinstatement works it could bring.
What a full repairing and insuring lease makes the tenant pay for
An FRI lease moves three costs from the landlord to the tenant. Each sits in its own clause, so read all three before you sign.
| Cost | Whole building let to one tenant | Floor in a multi-let building |
|---|---|---|
| Repair | The tenant repairs the whole building, structure included | The tenant repairs its own floor; the shared parts come through the service charge |
| Insurance | Usually the landlord insures and the tenant pays the premium back | The tenant pays its share of the building premium |
| Running the building | The tenant runs it | The landlord runs common parts, lifts and plant and recharges the cost |
GOV.UK's guidance for business tenants is short on this point. Your lease should say who is responsible for repairs and maintenance. When you move out, you may have to pay for repairs or return the property to the state it was in when you rented it.
So the label matters less than the wording. Two leases both called FRI can put very different repair bills on the tenant. The detail sits in the definition of the premises and in the repair covenant.
Repair, renew or improve: where the line sits
A repair covenant asks the tenant to keep the premises in repair. It does not, on its own wording, ask for a better building than the one let. The line between repair, renewal and improvement is where most disputes start.
Three tests come up again and again in practice:
- Is the work putting right damage or decay? That is repair, even if it means replacing a part with a modern equivalent.
- Is the whole, or most, of an element being replaced? Renewing a roof covering can still be repair. Rebuilding the structure is usually something more.
- Does the work leave the landlord with something better or different? That points to improvement, which a plain repair covenant does not normally require.
Courts treat this as a question of degree on the facts, so take legal advice on any large item. Watch for "keep in good repair" in an old building. It can oblige you to put the premises into repair first, even if they were in poor condition when you took them.
Service charges follow a similar line. The RICS professional standard on service charges is clear on improvements. Landlords should not expect to recover them, or works meant to enhance their investment, through the service charge. Its words cannot override the lease, so the lease still decides.
Schedule of condition and repair caps
A schedule of condition records the state of the premises when the lease starts, usually with dated photographs. Attached to the lease, it lets the repair covenant say that the tenant need not put the premises in better condition than the schedule shows.
It is the simplest protection a tenant has. Without it, at the end of the lease the argument is about what the floor looked like years earlier, with nobody able to prove it.
| Limit | What it does | When it suits |
|---|---|---|
| Schedule of condition | Caps repair at the condition recorded at the start | Any older building, or a floor taken as seen |
| Structure and roof excluded | Leaves the building's frame and roof with the landlord | A floor in a multi-let building |
| Inherent defects excluded | Leaves design and construction faults with the landlord | Newer buildings and recent refurbishments |
| Cap on service charge repairs | Limits the tenant's share of major works | Short leases in older buildings |
A schedule is only as good as its detail. Photographs of every room, the roof, the plant and the facade, with notes on defects already there, save weeks of argument later. Agree it with the landlord and sign it before completion.
Service charges in a multi-let building
In a multi-let building the FRI tenant pays for repairs to the shared structure, roof, common parts and plant through the service charge. Its share is set by the lease, often by floor area.
The RICS professional standard, Service charges in commercial property, 2nd edition, has been in force since 31 December 2025. It sets mandatory requirements for RICS members and RICS-regulated firms managing the charge.
The standard also deals with one-off costs. A tenant on a five-year lease may be asked for a share of a new boiler that lasts far beyond its term. RICS suggests spreading foreseeable major costs through a sinking or reserve fund rather than charging them in one year.
Ask for the last three years of service charge accounts and any planned major works before you sign. A roof or plant replacement due in year two is a cost you can negotiate now, and cannot later.
Insurance usually sits outside the service charge. RICS says premiums are usually billed separately, and the landlord should explain how the building's premium is split between tenants when asked.
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FRI at lease end: dilapidations and reinstatement
At the end of an FRI lease the repair covenant comes due. The landlord's surveyor lists what it says you owe in a schedule of dilapidations. Under the Dilapidations Protocol it comes generally within 56 days after the lease ends.
The schedule splits the claim into repair, redecoration and reinstatement. Each follows its own rules, and the difference matters to the bill.
- Repair. Damages cannot exceed the fall in value of the landlord's interest, under section 18(1) of the Landlord and Tenant Act 1927. No damages are due for repairs made valueless by demolition or structural alteration.
- Redecoration. RICS guidance says section 18(1) does not apply to decoration, so the cost of the works is the usual measure.
- Reinstatement. Removing your alterations follows the lease and any licence for alterations, and the section 18(1) cap does not apply either.
During the lease, the Leasehold Property (Repairs) Act 1938 gives some protection. On a lease of seven years or more with three or more years left, a tenant can serve a counter-notice within 28 days. The landlord then needs the court's leave to claim damages or forfeit for disrepair.
A fixed end date shapes the works. At Beaumont House in Kensington, a client with five weeks left on its old lease had 750 sq m refurbished in three weeks. Work done before the end date can settle items on the schedule instead of paying for them.
Energy rating is a lease-end question too. A landlord cannot let a non-domestic building below EPC E without a registered exemption. See our guide to MEES regulations for commercial property before a handback.
Negotiating an FRI lease before you sign
The cheapest dilapidations claim is the one you negotiate away before signing. Heads of terms are the moment, because every later change costs legal fees and goodwill.
Bring the building into the conversation, not just the rent. A contractor's walk of the floor before you sign turns "repair" into a list of items with a likely cost. That gives your solicitor something specific to negotiate.
In a multi-let building, ask the landlord how the shared parts are maintained. At Portsoken House in Aldgate we refurbished floors and rebuilt the reception at nights and weekends. The rest of the building stayed let. The service charge pays for that kind of planning, so ask to see it.
Ready to put numbers on the lease? Send us the draft lease for a free costing of the repair and reinstatement items, before the terms are fixed.
- The draft lease: definition of the premises, repair, decoration, reinstatement and yield-up clauses
- A schedule of condition, with dated photographs, agreed and attached
- Any exclusions: structure, roof, inherent defects, caps on major works
- The last three years of service charge accounts and any planned major works
- The insurance policy terms and how the premium is apportioned
- The current EPC and its recommendation report
- Any licence for alterations you will need for your fit-out
