As a commercial landlord, you will want to ensure that your premises are kept in a good state of repair throughout the tenancy and once the tenancy has ended.
It is therefore crucial that a landlord understands what they are able to claim for under the terms of the lease by way of claim for dilapidations.
In her latest article, Dispute Resolution Solicitor Olivia Parkinson outlines what dilapidations are and how landlords can make a claim.
What are commercial property dilapidations?
When a commercial tenant has neglected the state of a property and left it in a poor condition, it may be considered dilapidated.
In such a case, the landlord can begin a process, known as a dilapidation, to recover any loss they’ve suffered due to the damage caused by the tenant.
This can include things such as the removal of any fittings, general decoration of the property and any damage caused to the property.
Related: Lease or licence – what’s the difference and which is best
Who is responsible for dilapidations?
There will generally be a repair obligation within a lease that requires the tenant to keep the property in a good state of repair during and at the end of the lease.
A failure to do so will be a breach of the lease and could leave the tenant exposed to a potential dilapidations claim.
Every lease has different wording regarding the tenant’s obligations, so it is important that any landlord ensures that a dilapidations clause is in place before entering into a commercial lease.
Related article: Who is responsible for repairs and maintenance in a commercial lease?
What is a schedule of dilapidations?
A landlord can instruct a surveyor to complete a schedule of dilapidations, either during the lease or at the end of it, which will set out the condition of the property and the items of disrepair.
We would recommend that the surveyor preparing the schedule seeks legal advice in relation to the legal interpretation of the obligations in the lease.
The tenant will then be able to seek their own advice from a separate surveyor who can consider the schedule of dilapidations completed by the landlord’s surveyor and respond to the landlord’s claim.
If you would like any assistance with this, please don’t hesitate to get in touch with our team here.
What is included in a schedule of dilapidations?
A schedule of dilapidations will include:
- Wording which sets out the condition of the property
- An itemised list of dilapidations
- An outline of what is required to rectify the breach
- The likely cost of repair
Who pays for a dilapidation survey?
Generally, the lease will require the tenant to pay for a schedule of dilapidations and any enforcement action that is required afterwards.
However, this isn’t always the case, so it is important for you, as a landlord, to consider the terms of your lease before beginning a dilapidation.
At Frettens, we can assist in reviewing the terms of your lease to ensure that your tenant will bear the costs of any dilapidation. You can get in touch with us using the contact information at the bottom of this article.
Can landlords claim dilapidations?
Landlords will be able to claim for dilapidations that are in breach of the terms of the lease.
It is therefore crucial to seek legal advice as to the repair obligations that a tenant is subject to, and what can therefore be claimed.
How long does a landlord have to claim dilapidations?
A landlord should serve their schedule of dilapidations within a reasonable time on the tenant and in any event not more than 56 days after the end of the lease.
What is the process of a dilapidation claim?
If each party’s surveyors are unable to reach an agreement as to the amount claimed in their respective schedule of dilapidations, the landlord is entitled to issue a claim to recover the monies claimed.
In this instance, the Court will be asked to decide the extent of the liability of the tenant and will likely order that the tenant pay the landlord damages.
Do I need a solicitor to make a dilapidation claim?
The Courts will expect landlords to have followed the Pre-Action Protocol for Claims for Damages in Relation to the Physical State of Commercial Property at Termination of a Tenancy before issuing their claim.
Solicitors could also assist in negotiating with the tenant in order to reach an amicable settlement. We would therefore advise landlords to seek legal advice to ensure the correct process is followed for a dilapidations claim.
You can get in touch with our specialist team below.
Specialist Dilapidation Solicitors
If you have any questions following this article, or would like to instruct us to launch a claim, please contact a member of our bright Dispute Resolution Team.
It is always beneficial to seek legal advice from the outset before launching a claim by yourself.
Call us on 01202 499255 or fill in the form at the top of this page for a free initial chat.
As a firm of Chartered Surveyors we often get requests for section 18 Valuations where the cost of works detailed within the Schedule of Dilapidations become an issue. The valuation provides a a statutory cap on the level of damages claimed based on the value in and out of repair. The difference between the two valuations being the diminution in value. If the diminution if value is less than the cost to the landlord of doing the works, the landlord can only recover that lower figure. Our team of building surveyors regularly prepare dilapidation schedules for both landlord and tenant with cost of works more often than not agreed between the parties' surveyors without the need for the section 18 valuation, though very useful when acting for tenants.