Dilapidations

Dilapidations can be summarised as breaches of lease covenants relating to the condition of a property, and the process of remedying those breaches.

Tenants enter commercial leases agreeing to keep premises in repair. If they do not Landlords have the ability to serve a schedule of dilapidations on a tenant either during or more commonly at the end of the lease.

A schedule of dilapidations itemises the breaches of covenant, and sets out the remedial works required to satisfy those breaches.

Dilapidations can be served during the lease as an interim schedule, or as a terminal schedule served within the last three years or more commonly after the end of the lease. For schedules served at the end of the lease the Dilapidations pre action protocol is now applicable.

A tenant generally has an ability to undertake works during the term of their lease or pay over financial compensation in lieu of work if the lease term has ended.

Financial compensation will ordinarily extend to include professional fees associated with the work, the Landlords cost of making the claim, mesne profits (loss of rent, rates etc.) and VAT if relevant.

All landlords and tenants of commercial properties will have to deal with the issue of dilapidations at some point in their lease contract. This is a complex area of property litigation that requires detailed and expert advice.

We act for both Landlord and tenant clients, negotiating successful and safe paths through the complex area of claims, enforcement and defence, to seek the best outcome including lease-end strategies and advice on repair notices, conditional break clauses and determination of disputes. In addition we can provide advice on diminution valuations and expert witness evidence.

 

Contact us for more information on how we can help you get the best result.

• Tenant Services
• Landlord Services

 

At all times we ensure good practice by complying with the Dilapidations pre action protocol and RICS guidance.

 

Tenants Services

• As a tenant, it is vital to seek comprehensive advice at the acquisition stage, during the course of your lease and at the end of the tenancy to minimise your exposure to dilapidations.
• The services we offer to assist tenants include;
• Pre-acquisition surveys and due diligence.
• Preparation of Schedules of Condition
• Dilapidations assessments for Financial Planning and compliance with financial reporting standards. (FRS12)
• Advice on repair notices
• Advice on interim schedules and statutory protection
• Advice on end of term schedules and financial settlements
• Strategic advice
• Break clause advice
• Dilapidations portfolio management for multiple locations.
• Procurement of remedial works
• Section 18 Valuation advice.

FOR FURTHER INFORMATION