What FRI actually means
"Full repairing and insuring" means the tenant is responsible for all repairs (internal, external and structural where the demise includes structure) and for the insurance of the building (often by way of reimbursing the landlord's premium). It is the most onerous lease structure on the tenant, and the one that drives the highest dilapidations claims at lease end.
The asymmetry FRI creates
An FRI lease places the tenant in the position of repairing a building they may have inherited in poor condition, without any prior obligation to inspect, document or evidence what they took on. The Schedule of Condition corrects that asymmetry by fixing the inherited condition in writing, and that defensive baseline is the starting point of every effective dilapidations defence.
Qualifying the repairing covenant
The standard mechanism is a clause stating the tenant is not required to put or keep the property in any better state of repair than evidenced by the appended Schedule of Condition. Where this clause is in place, the dilapidations claim at lease end is materially reduced. Items already present at grant fall away.
Section 18, the statutory cap
Even on an FRI lease without a Schedule of Condition, damages remain capped by Section 18(1) of the Landlord and Tenant Act 1927: the diminution in the value of the reversion caused by the breach. Where the landlord intends to demolish, refurbish or change use, the diminution may be nil. Section 18 is the second line of tenant defence after the Schedule of Condition.
IRI and effective-FRI structures
On internal repairing and insuring (IRI) leases the tenant's obligation is narrower, but dilapidations still arise on the internal demise. On effective-FRI structures (IRI plus service charge for external repairs) the practical exposure is similar to FRI. Specialist input remains valuable in either case.