Dilapidations – how to deal with them

A dilapidations claim comprises the works required to hand back a property to the landlord in compliance with the lease covenants. The works are typically divided into 4 categories:

• Reinstatement of tenants fixtures and fittings, eg removing your partitions
• Repair, ie replacing damaged ceilings and carpet
• Redecoration, ie walls, ceilings etc
• Compliance with Statute, eg electrical testing

Dilapidations claims affect all commercial leases. They apply during the term for repairs of an urgent nature which are known as an Interim Schedule or typically during the last 6 months or upon expiry of the lease and known as a Terminal Schedule.

Lease obligations do vary and there are strong defences for what is deemed to be reasonable compliance. Many occupiers are unaware of their obligations at lease end and therefore we recommend an assessment by a Building Surveyor of the liability several months prior to expiry. Usually, the works can be programmed into the relocation to the new premises prior to the expiry of the lease which achieves a satisfactory resolution to the obligations and is by far the most appropriate method of settling the claim. By instructing a Building Surveyor prior to lease expiry, additional savings can be made including loss of rent and claims for landlord’s negotiation fees.

If time does not permit the works to be undertaken, the landlord will seek to claim a cash settlement for the work. In this situation we can offer an expert analysis and defence of the claim which often results in a significant saving and the best value. For more information please contact Marcus Evans on 020 7953 7638.