Dilapidations

Our dilapidations service helps both landlords and tenants of commercial properties.

For landlords, it is usual to prepare and serve a Schedule of Dilapidations when the lease is expiring and the current tenant is vacating a property that is in disrepair. For a tenant not renewing its lease, we can advise on the potential liability that will arise if a schedule is served by the landlord.

The dilapidations claim process involves the consideration of the current lease terms, inspection of the property and assessment of likely liability for repair works to be completed.

As RICS Registered Valuers, we are also able to undertake “Section 18” valuations. These are necessary as there is a statutory cap on damages, which involves calculating the ‘diminution in value’ of the landlord’s interests that have been affected by breaches of a lease covenant. This all sounds a little bit technical, but needless to say, we can walk our clients through the process with ease.

Schedules of Condition are paramount for tenants when leasing commercial properties that are older or out of repair.

A Schedule of Condition will limit a tenant’s repair liability throughout the term of the agreement, and also at the end of a lease. This service involves us evaluating the property to enable an accurate schedule, or record, showing a true reflection of the property’s condition when the lease commenced. We then liaise with solicitors to ensure the repair clauses in the lease are appropriate for the age and condition of the property.

Whilst this service is most advantageous for tenants, in our opinion it can also be beneficial to landlords. As well as limiting the liability of repair and maintenance of the building throughout the lease, both parties may need to show the condition of a property at the commencement of the lease agreement. Without a Schedule of Condition, there is no definitive way of proving the previous condition of a property.

If the repair clause in the lease says the tenant must keep the property in a good and substantial repair then this will include remedying defects that exist at the outset. It is no defence to say “it was like that when I moved in”. A schedule of condition will exclude the tenant’s liability to remedy pre-existing defects.