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Dilapidations

A lease will set out the contract terms between a tenant and landlord, including obligations relating to the repair, decoration and alteration of the premises. Failing to comply with these requirements either during or at the end of the lease results in a dilapidation liability. 

Interim dilapidation schedules are issued during a lease when the landlord believes that the tenant is not keeping up his obligations, (only when there are three or more years outstanding on the lease) and a terminal lease is issued at the end of a lease when a landlord alleges that a tenant has not kept his repairing obligations. 

If you are terminating your lease as either a lessor or lessee, or issuing or facing an interim dilapidation schedule, Turner Surveyors are more than happy to help you with your dilapidations. 

Dilapidations claims must be conducted in accordance with the Civil Procedure Rules, and any claims must be 'fair and reasonable'. Claims must not be exaggerated. 

Firstly, we will recognize who we represent, and request the following information:

  • Information as to who all the parties are, 
  • All documentation, such as lease, licenses, coloured plans, agreements, letters, previous schedules. This information may take some sourcing, but it will enable accurate claims to be produced in the minimum time. 
  • What the client wants from the dilapidations - works carried out, monetary settlement, forfeit, tenant in court (although we must always act fairly). 
  • If acting for the landlord, who will serve the notice - is there a solicitor appointed?

Our role generally includes the following:

  • Assess the repairing, decoration, alteration and yield-up covenants within the lease and supporting documentation;
  • If working for a tenant, we will ask for a Section 18 valuation from the outset;
  • Advise as to whether it is better to undertake certain works prior to the expiration of the lease in order to remove or reduce the dilapidation liability, or to seek to negotiate a financial settlement with the landlord;
  • Prepare a report assessing the dilapidation liability providing a realistic breakdown of the potential claim; 
  • Be persistent in negotiating.

Repairs, decorations, reinstatement, professional fees for contract administration, professional fees for preparation of the dilapidation schedule, loss of rent, loss of service charge, and value added tax all may form part of a dilapidation schedule. The costs of dilapidations can be substantial, and therefore both landlord and tenant must plan for dilapidations to ensure that the long delays often associated with dilapidation claims can be reduced and tenants can move on without unnecessary and substantial loss.

Dilapidations should not be ignored until the termination of a lease. A tenant should ensure that he complies with the terms of the lease, and should plan to maintain the building accordingly. The obligations are clearly set out in the terms of the lease and by careful management tenants can minimise this risk by careful management. Turner Surveyors can assist in this process by production of suitable maintenance reports

 

 

 
                                       

Contact: gary@turnersurveyors.co.uk

07879 624646

 

2004 Turner Surveyors, 2004 Gary Turner