December 20, 2016
Dilapidations is a minefield and can often lead to unnecessary costs being paid in damages by the tenant or the landlord being left out of pocket with a property in disrepair at the end of a lease. It is therefore essential that these matters are dealt with by experienced practitioners to ensure they are handled fairly and diligently.
In commercial property, dilapidations principally concerns the tenant’s failure to observe certain express and implied obligations within the lease, thereby committing a breach of covenant. In general terms, this falls into four main categories: repair, decoration, reinstatement and statutory compliance.
The ‘yield up’ clause is also key to reiterating the requirements imposed upon the tenant elsewhere in the lease, as well as outlining further conditions to ensure the premises are handed back to the landlord with vacant possession, and in a properly repaired, decorated, reinstated and cleansed state compliant with current regulations.
Most landlords and tenants of commercial property will, at some point, come across a schedule of dilapidations. This may either be an interim schedule (during the term), terminal schedule (within the last three months of the term) or a final schedule (following lease expiry); there are legal parameters which define the content, correct method of service and timing of each.
At Building Surveyors Ltd, we act for landlords in the preparation of interim, terminal and final schedules of dilapidations for formal service upon the tenant. Our schedules are accurately prepared by our team of chartered surveyors following a detailed inspection of the premises and adhere to the civil procedure rules and pre-action protocol.
Equally we represent tenants in the event that a schedule of dilapidations has been served upon them to negotiate a fair claim.
All budget costs are the subject of verification through recognised cost indices and, where appropriate, subjected to a competitive tender to ascertain the true market rate for the claimed works.
This process obviates the potential for ‘inflated’ or ‘unsubstantiated’ surveyor’s costs, which may otherwise exacerbate a dispute between the parties.
Even if the landlord does not issue a schedule of dilapidations a tenant will still have potential dilapidations obligations and a chartered building surveyor can give advice as to the scope and potential cost of the obligations.
Schedule of condition
Before a lease is signed, either party may request the inclusion of a schedule of condition to identify the condition of the premises at the date of lease commencement. A properly prepared, authorised and engrossed schedule of condition will serve as documentary evidence as to the pre-existence of any disrepair should a dispute later arise at lease expiry.
Building Surveyors Limited prepares detailed and accurate schedules of Condition either on a purely photographic or photographic and written basis to avoid dispute over responsibility for disrepair further down the line.