At the end of a commercial property lease, a landlord will usually serve a Schedule of Dilapidations on the outgoing tenant which tells the tenant the repairs that landlord requires prior to the property being handed back. This is known as The Dilapidations Claim.
The claim will usually have been compiled by a building surveyor acting on behalf of the landlord, who will have visited the premises and examined them, making a note of defects to the building fabric and, if included within the leased demise, the external areas such as car parks and gardens.
In the case of some smaller dilapidation claims, the tenant might agree the schedule of dilapidations and will either complete the works, which are then examined to ensure they are of a suitable quality defined by the terms of the lease, or will offer a financial settlement in lieu of doing the works.
However, this is quite rare and in most cases, the tenant will also engage the services of a building surveyor to defend the dilapidation claim on their behalf.
The building surveyor’s job, when acting on behalf of the tenant is to try to reduce the amount of the claim made by the landlord.
Again, the building will be thoroughly inspected in conjunction with the lad lord’s claim, taking into account certain terms and clauses that appear in the lease.
If the tenant had taken the precaution of having a good quality schedule of condition carried out at the start of the lease, it’s likely that the dilapidation claim will be able to be substantially reduced, assuming that the property has been maintained properly throughout the duration of the lease.
The building surveyor will examine all areas of the dilpapidations claim and will cost all of the repairs and agree a schedule of repair works with the tenant.
If time permits, the surveyor will put the work out to tender in order to determine the actual market price for the work. It is then up to the client and their surveyors to negotiate a settlement – which will either be a cash settlement or will involve reinstating the property to the condition stated in the lease.
With larger dilapidation claims, it is often better for the tenant to carry out the reinstatement works, since the work will have been tendered and in most cases, managed by the tenant’s building surveyor. This has the effect of reducing or negating the landlord’s claim and will almost certainly be cheaper than trying to do it yourself or paying the landlord in lieu of doing the works (which is what many landlords prefer).
However, the subject of dilapidations is extremely complex and is by far the largest cause of landlord and tenant disputes.
For this reason, whether you are a landlord or a tenant, you should choose your dilapidation surveyor very carefully, since a lot of time and money can be saved by using highly experienced and competent advisers.
With more than 30 years experience of dilapidations, we are true experts in this area and will work hard to maximise the result for either landlords or tenants.
We have many case studies to refer to and will of course, be very happy to provide references from existing clients if required.
If you would like a free initial appraisal of your own unique situation, please call us now on 0121 711 7110 without obligation.