Effectively Managing A Dilapidations Dispute

What Is Dilapidation And Why Does It Matter In Property Disputes?

What Are The Most Common Causes Of Dilapidation Damage Claims In Property Disputes?

How Can You Avoid Or Manage A Dilapidation Dispute Before It Happens?

The Process Of Managing A Dilapidations Dispute

Dilapidation Disputes

Effectively Managing A Dilapidations Dispute

Leaving a commercial property, as a tenant, can feel a fraught and challenging process. The popular perception is that landlords penalise tenants for leaving with excessive and unwarranted costs associated with ending the lease.

On the other side of the argument, landlords have to protect their interests and be fairly compensated for any damage and wear and tear that will affect the likelihood of finding new replacement tenants.

Given these two positions seem quite some way apart, the possibility of dispute is relatively high. An important part of avoiding expensive conflict is ensuring any dilapidations survey or dilapidations report is professional, fair and transparent.

What Is Dilapidation And Why Does It Matter In Property Disputes?

Dilapidation describes the process through which commercial properties age and decline through use. Dilapidations is the catch-all term used to describe instances of damage and wear and tear that occur during a tenancy.

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They matter because in the vast majority of leases the tenant is expected to return the keys to the landlord with everything as it was on the day they arrived. Any difference typically leads to a dilapidations claim from the landlord, seeking to be compensated for rectification and repair. This can happen at any time during the lease period but typically occurs at its completion before the tenant vacates the property.

Disputes arise when tenants reject a dilapidations claim as unwarranted or exaggerated. They may have a different view on what dilapidations have occurred, which are their responsibility and how much they might cost to rectify.

This is why it is considered standard practice to begin negotiations based on a dilapidation survey from a credible independent specialist dilapidations surveyor. This can go some way to gaining agreement between the two parties.

What Are The Most Common Causes Of Dilapidation Damage Claims In Property Disputes?

There are many causes of dilapidation damage claims. We discuss some common frustrations below. Avoiding them and you will make a dilapidation claim dispute less likely.

Many commercial leases require tenants to decorate regularly – perhaps every three years for the interior and five years for the exterior. Failure to undertake these works will be reflected in any landlord’s dilapidation claim.

Any alterations instigated by the tenant,  including those considered an improvement, will be included in a claim too. Claims are always based on returning the property to exactly as it was.

Structural issues may cause a claim without being immediately apparent without a specialist dilapidation survey report.

If rectification works take time, the landlord can claim for loss of income during that period.

It is worth remembering the dilapidations process is designed to compensate landlords for financial loss associated with tenant activity. The good news is tenants are protected by law. Section 18(1) of the Landlord and Tenant Act 1927 caps damages that a landlord can recover.

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How Can You Avoid Or Manage A Dilapidation Dispute Before It Happens?

The biggest step you can take towards avoiding dilapidations disputes is to ensure everyone is clear on the process at the time of signing the lease. Signing a well-negotiated mutually beneficial contract at the start of any tenancy is the best way to avoid problems at the end of one.

Tenants who sign a lease without an agreed condition survey when they move in, for example, are certainly at a greater risk of dispute. Regular condition surveys in situ protect tenants from surprises when they try and leave too. Undertaking regular rectification and repair work will generally be more agreeable to landlords than leaving them with a potentially large claim at the end of any agreement.

In general, continual dialogue regarding dilapidations during the life of the tenancy is the best approach. Giving plenty of notice, planning and getting advice when it comes time to leave is a good move too.

The Process Of Managing A Dilapidations Dispute

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There is plenty of professional advice available for anyone who feels they are heading towards a dilapidations dispute. The Royal Institution of Chartered Surveyors, for example, offers a dilapidations scheme specifically designed to support quick and economic resolution of lease-end disputes before expensive lawyers get involved. They can answer questions such as what is a dilapidation survey, for example, and who should pay for it?

As fully Chartered Surveyors, Fresson and Tee are ideally placed to help navigate lease liabilities and support speedy dispute resolution for either party.

We can provide survey, protocol and delivery teams who can protect the interests of both landlords and tenants. There’s no need to face a dilapidations dispute without the right professional support.

If you would like to discuss your dilapidation requirements further, please call our office on 020 7391 7100 or email us at surveyor@fandt.com.