What are property dilapidations and how do they affect tenants and landlords?

Dilapidations essentially refers to the situation where a tenant does not leave the commercial property in the condition required under the terms of their lease.

It can cost money and time to restore the property to its agreed condition and the landlord may insist the work is completed by the tenant, or claim back for the cost of restorative work.

By seeking expert legal advice before agreeing and signing the lease, tenants and landlords alike will know where they both stand which avoids disputes arising over bills for unexpected repairs.

Instruct a surveyor

Before the lease agreement is signed, a surveyor can provide an inspection report to ensure that the property’s current condition is accurately recorded and agreed.

If the surveyor uncovers issues with the property’s state of repair, a Schedule of Condition can be attached to the lease which means at the end of a lease a tenant will not be expected to carry out repairs to defects in the property which were already in existence.

Alterations to the property

Tenants may need to liaise with the landlord before carrying out alterations, even if the works are approved, the tenant may be required to restore the property to its previous state at the end of the tenancy, even if the alterations might be considered to add value to the property.

Schedule of Dilapidations

If a landlord believes that repairs and remedial work are necessary at the end of a lease, a Schedule of Dilapidations should be presented – which sets out the list of repairs needed and the costs of the same. It should identify the potential sums the landlord could pursue from the tenant should the repairs not be adequately completed before the end of the term.

There is a procedure which should be followed.

Where a dilapidations claim cannot be resolved, it could be that there is a provision in the letting agreement that permits the landlord to recover professional fees from the tenant.

If you have an issue relating to a Schedule of Dilapidations get in touch with your legal adviser who will have experience in dealing with dilapidations for lease property.

Need legal advice on dilapidation claims and other commercial property matters? Contact us today.