Ask The Experts - Leased Property - Boiler Replacement

Published: 26/02/2010

Question

I need clarification of the responsibilities of the property owning GP partners when an old central boiler is replaced.

I understand that this is considered as an internal repair which the practice should pay for. My partner, as the landlord, stands to benefit more from the “improvement element” than me as a non-property owning partner, so I think they should pay a higher percentage of the cost. What is a fair percentage?

Answer

The responsibility of the Tenant (i.e. the GP Practice including both property and non property owning Partners) is for internal repair including any repair necessary to the services, be it central heating or the boiler. The complication comes when that repair in part includes improvement. In part, the reason for this is of course that any improvement should increase the value (both capital value and rental value) of the premises. It is very difficult, and probably impossible, to give any rule of thumb or simple division and each case needs to be looked at individually.

For example, if a surgery had an old and partial central heating system where a boiler had failed due to age and disrepair and the Practice replaced and improved the system with a far more efficient boiler with full central heating throughout. The valuer needs to look at the building and decide what increase in value the property enjoyed between that with the less efficient, partial central heating (but assuming it to be in good repair) compared to that with the more efficient boiler and full central heating. The increase in value element should be paid by the Landlord/property owners with the residue and thus repair element by the Practice.