When leasing a commercial property in the UK, it’s important to understand the type of lease agreement you’re entering into—and Full Repairing and Insuring (FRI) leases are among the most common.

Whether you’re a business owner planning your first office move or a landlord structuring lease terms, understanding how FRI leases work can help you avoid hidden costs and make informed decisions.

What Is an FRI Lease?

A Full Repairing and Insuring (FRI) lease is a type of commercial lease in which the tenant takes full responsibility for both repairs and insurance of the property during the lease term.

This means the tenant is either:

• Directly responsible for arranging repairs and insurance, or

• Pays for these costs indirectly through a service charge administered by the landlord (common in multi-let buildings).

What Does the Tenant Pay For?

Under an FRI lease, the tenant typically covers:

• Internal and external repairs and maintenance

• Building insurance premiums

• Structural upkeep, unless specified otherwise

• Contributions to common area maintenance (if part of a shared estate)

Essentially, the tenant is responsible for keeping the property in good condition as if they owned it.

Why Are FRI Leases Popular?

FRI leases are widely used in the UK commercial property sector because they:

• Give landlords peace of mind that the asset will be maintained

• Offer tenants more autonomy over the premises

• Create clear responsibilities for ongoing costs

This structure is especially common for longer-term leases or for properties let to a single tenant.

Key Considerations for Tenants

Before signing an FRI lease, tenants should:

• Commission a building survey to understand the property’s current condition

• Negotiate a schedule of condition to limit liability for pre-existing issues

• Clarify what is included in service charges or insurance contributions

• Understand potential costs of dilapidations (restoring the property at the end of the lease)

Failing to account for these responsibilities could result in significant unexpected expenses later on.

Landlord Considerations

Landlords benefit from reduced responsibility but should:

• Ensure the lease is clearly drafted

• Provide transparency on service charges and insurance premiums

• Monitor compliance throughout the lease term

In Summary

A Full Repairing and Insuring lease is a commercial lease where the tenant is responsible for repairs and insurance, either directly or via service charges.

This lease model promotes long-term upkeep of the property while giving tenants operational control. But for both parties, it’s vital to fully understand and negotiate the terms before signing.