What are dilapidations?
If a lease exists, a claim for dilapidations may arise. A dilapidations claim is a liability as a result of failing to comply with the lease covenants.
The usual main Tenant obligations are as follows:
- Repair – to keep or put the demised premises in repair
- Redecoration – an obligation under the terms of the lease to prepare and redecorate previously painted elements
- Reinstatement of alterations – remove all tenant alterations at lease expiry and repair and make good all disturbed
- Compliance with statute – ensure the demise complies with statute
The landlord’s dilapidations claim is prepared by a surveyor who produces a Schedule of Dilapidations and Quantified Demand which is served on the Tenant, generally by the Landlord’s solicitor.
At this point, the Tenant is presented with a number of options including; undertaking of the dilapidations works to result in lease compliance or, entering into a negotiation with the Landlord. It is important to note, dilapidations is a complex area
and there are several considerations, the main one being, what has the Landlord suffered as a consequence of the lease breaches.
There are a number of factors that can affect how we would recommend addressing a potential dilapidations claim. It is important that the strategy is considered at an early stage whether acting for a tenant or a landlord to ensure that the approach is
proactive. We can also advise either party on dilapidations liabilities at commencement of the lease and the best way to approach the repairing covenants before the lease is signed.
How we can help
The first exercise when acting for either Landlord or Tenant is to understand the lease provisions. This will involve a detailed examination of the lease, sub leases and any other associated documents such as the licence to alter. The contractual obligations
must be understood before appraising any dilapidations claim.
When acting for Landlords we will:
- Advise on whether professional fees incurred by the Landlord are the Tenant’s responsibility
- Prepare detailed Schedules of Dilapidations in compliance with the Dilapidations Protocol
- Where necessary, recommend for the appointment of specialists such as mechanical and electrical engineers, or drainage specialists
- Negotiate the dilapidations claim to full and final settlement with the Tenant or their appointed surveyor
- Project manage onsite dilapidations repair and redecoration works upon the demise being returned to the landlord with vacate possession and the final settlement is agreed.
If appointed by Tenants we will:
- Advise on the lease obligations
- Provide recommendations on the Tenant’s exit strategy. This will include an assessment of the dilapidations liability and whether we believe undertaking of the works will be more sensible as opposed to reaching a settlement with the Landlord
- Responding to the schedule of dilapidations served by the Landlord
- Negotiating with the Landlord or the Landlord’s appointed surveyor in order to reach a settlement. There are a number of aspects requiring assessment including; application of VAT, supersession, inherent defects, Landlord’s intentions for the unit
and the loss that the Landlord will sustain due to the Tenant’s breaches
If you would like advice on dilapidations matters, please call our office on 020 7391 7100
or email us at firstname.lastname@example.org