D is for Dilapidations, meaning the breaches of a tenant’s lease covenants when it comes to repairs, reinstatement of alterations, redecoration and compliance matters. In a nutshell: the tenant not leaving a property in the condition they have agreed to in their contract.
The landlord of a leased property can raise a claim for dilapidations during the term of the lease (as an ‘interim’ dilapidations claim) or, more often, when the lease expires (as a ‘terminal’ dilapidations claim).
Any claim for damages is capped at the Diminution in Value of the landlord’s reversionary interest under s18 of the Landlord and Tenant Act 1927 in respect of repair. Common law covers claims for reinstatement and redecoration.
But what exactly are dilapidations? Who is responsible for putting things right, who pays the bill and where can you go for help?
At Trinity Rose, we have years of experience dealing with dilapidations claims and helping both landlords and tenants. We can help guide you as you navigate disputes and consider your position.
Let’s start by understanding a bit more about property dilapidations…
What are property dilapidations?
The term ‘dilapidations’ incorporates many things that essentially mean the tenant is not leaving the property in the condition they have agreed to in their contract. It will cost money and time to restore the property to its agreed condition and the landlord may insist works are completed by the tenant, or alternatively a monetary claim is made against the tenant in lieu of undertaking works, to recover the costs which relate to the landlord’s losses in putting matters right.
Dilapidations can relate to many of the Tenant’s obligations written in the lease; typically claims include matters of redecorating, repairs to the building structure and fabric, reinstatement of alterations carried out by the tenant during the lease term, or matters of statutory compliance.
When are claims made?
Interim claims are commonly made in order to force the Tenant to act during the course of the lease, to ensure they meet their obligations. It is important that such claims, when made by a landlord, are appropriately timed and mindful of the structure and mechanics of the lease to ensure they are enforceable.
Terminal claims are often prepared before the end of the lease to enable to Tenant to act upon the landlord’s schedule in readiness for the lease ending. However, it is assumed the tenant is aware of its obligations and there is no requirement for the landlord to claim until the lease comes to term.
What are dilapidation cost?
The landlord can claim the cost of any works needed to restore the property to the condition in which it should have been left. e.g. repainting a room which was decorated during tenancy; the cost of rebuilding a wall the tenant removed without consent, or the costs of repairs due to an act or omission on the part of the tenant.
In addition there are often valid claims for failure on the tenant’s part, to comply with its statutory obligations i.e. Gas Safety, Electrical Safety, testing of equipment / installations belonging to the Landlord.
The claim can include surveyor’s and solicitor’s fees for preparing and issuing the schedule of dilapidations; surveyor’s fees for the procurement and management of the dilapidations works and, if applicable, VAT.
In certain circumstances, if the tenant fails to fulfil its obligations by term end and the landlord has a prospective tenant ready to occupy the building immediately afterwards, the landlord may be entitled to other ‘Heads of Claim’ relating to loss of rent and other payments it may be entitled to under a new lease, during the time it takes for works to be completed.
What is a schedule of dilapidations?
This outlines the works needed/costs included to restore the property to a certain state/condition. As your local dilapidations surveyor, we can put together a schedule of dilapidations on your behalf if you are a landlord, or review a claim put to you if you are the tenant of a property.
Who is responsible for dilapidations?
Dilapidations claims are usually prepared on behalf of a landlord to be served against a tenant. If things are not set right before the end of the lease, the landlord may have a valid claim for damages against the tenant. Essentially dilapidations claims relate to breaches of contract, and are therefore civil claims in law.
How can a dilapidations surveyor help?
We work closely with both landlords and tenants when it comes to dilapidations. We have years of experience and draw upon expert knowledge to assist with schedules of dilapidation, lease analysis and property inspections.
We can also assist with the preparation of dilapidations provisioning reports, which can assist a tenant of a commercial property with a full assessment of the financial quantum of its likely dilapidations liability, so that provisions can be put into company accounts. Such reports are normally only accepted when supported by a detailed analysis and report prepared by a Chartered Surveyor.
Find out more
Whether you are a landlord looking to make a claim or a tenant aiming to challenge a schedule of dilapidations, or make a suitable accounting provision in respect of your liability for dilapidations, our team of RICS Regulated Chartered Surveyors are here to help. Click here to find out more about our dilapidations services.
Alternatively, please pop into your local branch of Trinity Rose or give us a call. Our friendly team will be happy to answer all your questions.
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