The law of dilapidations has long been misunderstood by landlords and tenants alike. Dilapidations and the associated statute and case law can be complex and therefore seeking expert guidance is essential and could save you significant amounts of time and money as either a landlord or tenant.
Although the negotiations at lease end are important, what is often overlooked are the decisions made when the lease is agreed. The dilapidations process is a result of the covenants written into the lease signed by both parties, and therefore the repair and redecoration clauses within the lease are hugely significant. As Solicitors write the leases, often landlords and tenants fail to read the lease thoroughly instead trusting their legal representatives to inform them of anything important, a mistake that has the potential to be expensive at lease end. One method of reducing the repairing liability is to have a Schedule of Condition attached and referred to within the lease prepared by a Chartered Building Surveyor. This would document the building condition at the beginning of the lease, and limit the repairing liability within.
In other instances, the clauses within the lease can be misunderstood. ‘To put and keep in repair’ is a common lease term often misinterpreted, but requires the tenant to repair items that were out of repair when they took the building. It is therefore of paramount importance to have a good understanding of the clauses within the lease prior to entering into any agreement, obtaining advice from professionals if required.
Terminal Schedules of Dilapidations are served near the end of the lease term and itemise breaches of the lease. Once served by a solicitor, in accordance with dilapidations protocol the negotiation process can begin. Expert advice is key to achieving the best possible result, with background knowledge of case law and statutes a must. The Schedule of Dilapidations will usually be produced by a Chartered Building Surveyor and should be negotiated by one also. It is common that the Landlord and Tenant often misunderstand their responsibilities and therefore enter the negotiation stage poorly prepared and with unrealistic expectations. Therefore the knowledge and experience of a Building Surveyor is key throughout the process.
In summary, the Dilapidations Schedule served at the end of the lease term is largely dictated by the lease terms signed prior to occupation, as well as the tenant’s treatment of the building in the interim. One way a tenant can manage their repairing liability is to instruct a Building Surveyor to prepare a Schedule of Condition. At the end of the lease period both Landlord and Tenant should seek representation to manage their interests under a Dilapidations claim.
Underwoods LLP act for both landlords in dilapidations claims and tenants in defence of a claim. We have acted for a variety of clients including private landlords, local authorities, public houses, estate agents, banks and solicitors. We have accumulated a vast amount of knowledge and experience that has helped us to achieve consistently positive results for our clients. Whilst based in Northampton, we have national experience and coverage.
If you have any questions or queries please call either Bill Crowther (01604 783003) or Ben Alders (01604 783000)
Posted By: Bill Crowther
The law of dilapidations has long been misunderstood by landlords and tenants alike. Dilapidations and the associated statute and case law can be complex and therefore seeking expert guidance is essential and could save you significant amounts of time and money as either a landlord or tenant. Although the negotiations at lease end are important, […]