We outline two common types of commercial property leases – Full Repairing and Insuring (FRI) and Internal Repairing and Insuring (IRI) – and what they mean for you as a Mileway customer.

Full Repairing and Insuring (FRI) lease

With this type of lease, the tenant is responsible for both external and internal maintenance, including:

• roof, gutters, and windows
• internal features such as flooring and décor
• ensuring the property is adequately insured

With an FRI lease, the tenant must take out the appropriate insurance for the building, covering risks such as damage, fire, floods, and break-ins. This arrangement provides flexibility in choosing an insurance provider but also requires covering the costs and managing the property’s upkeep.

Internal Repairing and Insuring (IRI) lease

With an IRI lease, the landlord takes responsibility for maintenance of the exterior of the building (roof, gutters, etc) and building insurance, which means:

• the tenant does not need to cover structural maintenance
• the building is insured by the landlord
• the tenant may still need to insure the contents of their unit

This type of lease offers peace of mind as tenants are not responsible for managing repairs or insurance of the building itself. However, there may be a higher service or facility charge to offset the insurance costs.

Which lease type is most appropriate for your business?

Both FRI and IRI leases have advantages and the most suitable option will depend on your business needs. An IRI lease keeps maintenance responsibilities to a minimum, making it easier to focus on business operations. However, service charges may be higher. An FRI lease provides greater control over repairs and insurance but requires the tenant to manage upkeep and associated costs.

It’s always important to review lease documentation carefully to understand specific your responsibilities and commitments.

Maintaining a business-ready property

If responsible for repairs and maintenance (with an FRI lease), it’s advisable to conduct regular checks rather than waiting for issues to escalate or attempting to manage a backlog of repairs at the end of your lease.

Regardless of your lease type, it’s good practice to prepare a Schedule of Condition at the start of the tenancy. This document records the property’s condition at move-in to provide clarity on maintenance expectations when the lease ends.

For any questions about lease terms or maintenance responsibilities, please get in touch with us – we’re here to help.