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The term 'dilapidations' relates to claims for damages in relation to the physical state of commercial property during, or at the termination, of a commercial tenancy. A claim is made by way of the service of a 'Schedule of Dilapidations', a document that itemises the breaches of each of the relevant lease clauses, and provides a cost to remedy. These costs are then carried forward to a 'Quantified Demand' where they are summed. The schedule of dilapidations is normally created and endorsed by a Chartered Building Surveyor and service is undertaken by a solicitor.
When the Schedule of Dilapidations is received, it is common for the tenant to employ a building surveyor to evaluate its content in detail, and to advise the tenant of any errors within it, or of any defences that can be made against it. Comments are entered against each item of the schedule which can be disputed, and a revised settlement figure is provided to the landlord.
If the landlord and tenant cannot agree on a settlement of the claim, the matter may be decided in court. For this reason all involvement relating to the claim prior to court action is undertaken in accordance with the 'dilapidations protocol', guidance intended to ensure that the general principles of court pre-action are observed by all parties.
At Ayling Associates we can act for either landlord, or tenants, in dilapidations claims, during or at the end of commercial leases. Please call for a no obligation consultation so that we can evaluate your circumstances and advise how we may be able to assist.
OUR DILAPIDATIONS SERVICES
At all stages of a property lease, however specifically at termination, questions are inevitably raised around dilapidations. For example, what can the landlord expect in terms of the building’s state of repair and what will it cost the tenant to remedy any breaches of covenant?
At Ayling Associates we can advise on all questions around dilapidations, and we provide expert advice.
WHY MIGHT YOU NEED A DILAPIDATIONS SERVICE?
All commercial leases contain covenants that require tenants to repair and decorate buildings and maintain the land they occupy, in addition to complying with the relevant statutory requirements. Any alterations or additions to the building may have to be removed, if required by the landlord.
The wording of such covenants can be complex and the emphasis on the structure of each clause can affect the tenant’s liability, as well as the landlord’s expectation of the condition of the building at the end of the lease. Repairing covenants may be limited by a schedule of condition, which can impact a dilapidations claim. Landlords may wish to claim for loss of rent or other mesne profits. These can include service charges and insurance premiums or professional fees.
Another consideration is whether the lease covenants or the circumstances at expiry of the lease will allow a claim to be successful. This requires careful consideration and interpretation when assessing the potential dilapidations liability at the end of the lease and how this may affect a potential claim. A correct assessment of dilapidations, by an experience building surveyor, can guide landlords and occupiers in a range of property decisions. For example, whether they should renew a lease or exercise a break clause, or whether to re-let or redevelop.
HOW CAN AYLING ASSOCIATES HELP WITH YOUR DILAPIDATIONS LIABILITY?
We offer expert dilapidations advice to both landlords and tenants, including:
Preparing terminal schedules of dilapidations
Preparing interim schedules of dilapidations during lease terms
Negotiating financial settlements for landlords and tenants at the termination of commercial leases
Monitoring lease expiry works for tenants
Tendering, project managing repair and reinstatement works for tenants prior to lease end, or for landlords after expiry of the lease
Preparing dilapidations assessment reports prior to new leases being granted or during the term of the lease
Providing schedules of condition at lease commencement
Dilapidations experience across all commercial asset classes
Advice on the application of S18(1) of the Landlord and Tenant Act
Advising on VAT liabilities and obligations for dilapidations