Dilapidations is the term normally used to cover defects or disrepair which a tenant (often a commercial tenant) will be responsible for when a rented property is vacated.
Tenants and Leaseholders
When considering taking a commercial lease of a property or part of a property it is essential to carefully consider what the potential dilapidation liability might be, and what the cost of maintaining the property might add up to over the length of the lease. A dilapidation claim can substantially affect occupation costs – even for long leases. It makes sense to go into any lease with the benefit of professional advice in respect of the potential liabilities that may arise during occupation.
The RICS says . . . “It can come as a nasty shock towards the end of a lease when the landlord requires extensive work to remedy damage or disrepair or to put the premises back in their original state or if the tenant has made internal alterations.”
If the tenant does not carry out this work, they run the risk of having to pay the cost of having the work done.
Landlords
Landlords need to protect their property assets and investments and to give careful attention to the condition of their property investments in the longer term. It is important to landlords that repairing covenants are managed to protect longer term investment value and income.
Both landlords and tenants often fail to realise the importance of dilapidations and there are many pitfalls for the unwary.
Dilapidation Claims and Schedules of Dilapidations
At LBB Chartered Surveyors we offer a comprehensive dilapidation service and can prepare dilapidation appraisals, provide advice on potential claims, prepare schedules of dilapidations and advise and negotiate dilapidation claims on behalf of landlords and tenants.
In a schedule of dilapidations our Building Surveyors can indicate the estimated cost of any dilapidation works. With this information both landlords and tenants can make informed decisions about the property, consider the potential cost or benefit of a dilapidation claim and make sensible provisions for any potential future claim. This type of advice can be crucial to either a landlord or tenant. Sometimes this gives clients sufficient information to go on to settle any dispute themselves with the benefit of our advice.
Where required, we can act for landlords or tenants in the negotiation and settlement of dilapidation claims.
Our Building Surveyors can work with our valuers to advise on the value of a potential dilapidation claim and also prepare Section 18 valuations required under the Landlord and Tenant Act 1927 to establish if there is a diminution (loss) in the value of the freehold or leasehold interest.
John Byers has acted on many contentious dilapidation cases including the widely reported case of Ravensgate Estates Ltd v Horizon Housing Group Ltd [2007]. Clients include Majestic Wine Warehouse, RL Polk, One Housing Group, KCi Medical, various medial clients and many other commercial landlords and tenants.
Dilapidation Appraisals
Before entering into a lease it is wise to take expert advice as to the repairing liabilities that might arise under the terms and conditions of the proposed lease.
We offer a Dilapidation Appraisal service that provides expert advice on the potential dilapidations and costs that may arise given the building’s condition, and the proposed or actual lease terms.
Many clients who lease or occupy commercial business space enjoy the benefit of our expert advice even before they have committed to leasing a property, so they understand the condition of the property and what sort of obligations they are agreeing to; so they can make financial provision for them or negotiate better lease terms.
Our expert Building Surveyors consider the lease terms, inspect the property and guide clients as to works that may be needed, both immediately and later during the term of the lease to comply with lease terms.
For advice, or more information, contact:
