Dilapidations disputes are a common occurrence in the realm of commercial property management. Chartered Surveyors play a crucial role in resolving these disputes effectively, whether they are representing the landlord or the tenant.
In this blog, we will explore the role fulfilled by Trinity Rose in a dilapidations claim where we represented the Tenant in a claim put forward by our client’s Landlord. We begin by summarising what a dilapidations dispute is, and examining the role we fulfilled in representing the Tenant.
What is a Dilapidations Dispute?
A dilapidations dispute typically involves claims made by a Landlord against a tenant for breach of leasing obligations concerning property maintenance, repair, statutory compliance, decoration and reinstatement of alterations carried out by the tenant during the lease period. The goal is for both parties to assess whether the tenant has fulfilled their responsibilities and, if not, to determine the associated costs of remedying any breaches.
Our Role When Representing the Tenant
When we are engaged by a Tenant to assess a claim they have been served by their Landlord, our goal is to protect the Tenant’s interests and ensure a fair evaluation of their responsibilities. Here’s how we approach the situation:
- Review of Lease Obligations – we carefully review the lease terms to clarify the obligations that the tenant is claimed to have breached. Understanding the specific language of the lease helps in developing a defence against exaggerated claims.
- Conducting a thorough Dilapidations Survey – just as the Landlord’s surveyor should have done, we conduct a thorough assessment of the property to verify the legitimacy of the landlord’s claims. We aim to identify any discrepancies between the actual condition of the property and the allegations made in the Schedule of Dilapidations.
- Preparing a response to the Claim – we assist our client by formulating a comprehensive response to the Schedule of Dilapidations. This may include counter-evidence, negotiation of costs, and justifications for any contested claims. We do this in the format of a Schedule, which travels between the surveyors, chronicling the responses, which allows the particular aspects of any item in the claim to be assessed at any given point.
- Facilitating negotiations – we use our expertise in dilapidations protocol and precedent case law to advise our clients of their common law position. We will offer commercial advice on the merits of the claim to facilitate negotiations to try and reach a resolution, where possible, without entering into prolonged litigation.
- Claim cost management – we use our expertise in understanding the repair and maintenance of the property and associated costs to assess Landlord claims and offer a robust defence against inflated costs. In cases where repair costs are valid, we can help the tenant strategise whether this is undertaking works to the property, or agreeing on a settlement in lieu of works being undertaken.
The property
In this case, our claim was related to a large light industrial property on an industrial estate that our client had occupied for a significant number of years. They carried out extensive fit-out works to form office areas, staff welfare areas and additional toilets, as well as the installation of mezzanine areas within the warehouse.
The claim
The Landlord submitted a claim which essentially required our client to fully reinstate the property back to its original layout, replace lighting and services, as well as fully repair and redecorate the outside of the property and replace the roof covering.
Our findings and actions
- The Landlord had embarked on a project to improve the estate, which included works to the subject property. We requested the scope of works and were able to identify several items which clearly superseded aspects of the Landlord’s claim. These items required a forensic analysis of the specification of the Landlord’s works and associated costs, which we were able to use as evidence of the Landlord’s intentions in order to protect our client against the dilapidations claim.
- The Landlord should have issued a formal notice to reinstate our client, which was stipulated in the lease. They failed to do so, and as such, we were able to protect our client from the claim to remove/reinstate alterations.
- We were able to successfully defend a number of the Landlord’s claims due to the existence of a Schedule of Condition which was overlooked by the Landlord’s surveyor in the preparation of their claim.
- A number of the Landlord’s claims were overstated in terms of cost. We were able to agree a substantially reduced settlement by challenging the Landlord’s costs on the basis of similar projects we have undertaken which included similar works.
Outcome
We were successful in saving our client over £300,000 in dilapidations costs against the Landlord’s claim.
Conclusion
Chartered Surveyors are pivotal in navigating the complexities of dilapidations disputes. Our expertise ensures a fair process and helps to avoid unnecessary litigation.
We help our clients reach satisfactory resolutions using our multi-faceted skills which require us to have a balanced technical and legal understanding of such matters as:
- Reviewing and understanding leases and other contractual documents
- Inspecting and assessing properties
- Applying the findings of the inspection against the requirements of the lease
- Understanding and applying dilapidations processes and precedent case law
- Negotiation and commercial awareness
We work closely with our clients to understand their commercial and operational requirements, enabling us to develop a strategic approach to dilapidations which represents their best commercial interests. In this way, our role is invaluable in the dilapidations process.
If you have a dilapidations claim where you require our advice and input, we’d love to hear from you. Please contact us and speak to one of our Building Surveyors for an initial discussion about your requirements.