What Are Dilapidations?
Dilapidations have become a real power-house of revenue for landlords and an expense for tenants which all too often goes unaccounted for.
Dilapidations is a complex subject that is governed by statute and case law which has developed over hundreds of years. Dilapidations refer to a failure to comply with the obligations of clauses within a lease or tenancy agreement between a tenant and their landlord. This failure to comply normally relates to breaches of specific clauses such as; repair and maintenance, reinstatement, redecoration, compliance with statute and yield-up.
What can we do for you?
Acting on behalf of both Landlords and Tenants the unique selling point of Townsend and Renaudon is our multi-disciplinary practice and in-house wealth of knowledge.
Using their building pathology skills our Building Surveyors and Architects identify disrepair and prescribe the best remedy. Alongside this our Quantity Surveyors and Construction Cost Managers are on hand to provide accurate cost advice to ensure that the most economically viable solution is implemented.
Consideration of the tenant’s options
In most leases it is worth remembering that the tenant’s front-line obligation is to maintain and yield up the building in repair. It is not to pay money to the landlord. The need to pay money to the landlord only arises in circumstances where the tenant has failed in this front-line obligation. It is worth remembering, too, that the need to pay money (damages) does not arise in every case.
When acting on behalf of a tenant Townsend and Renaudon:
- Undertake an appraisal of the dilapidations position providing early advice as to the tenant’s lability and to allow budgetary provision to be made;
- Provide strategic advice as to the most advantageous methods of managing and minimising dilapidation liability; such as undertaking the works or negotiating a financial settlement;
- Obtain early involvement of the Landlord in order to manage expectations and avoid potential disputes;
- If the works are to be undertaken Townsend and Renaudon can fully design, procure and manage the dilapidation works to completion and ultimately hand the building over to the Landlord at lease end in the condition as so required by the lease;
- If it is not possible or feasible to undertake the works Townsend and Renaudon can negotiate the best financial settlement possible for the tenant;
Consideration of the landlord’s options
Whether the lease with your Tenant is terminating due to the exercising of a break clause or expiry of the term, we offer a proactive service aimed at securing the best settlement for the Landlord in order to compensate for their loss as a result of the tenure.
When acting on behalf of a Landlord Townsend and Renaudon:
- Prepare Schedules of Dilapidations: Following a thorough review of all lease documentation our surveyors will visit the property and undertake a thorough inspection of all elements of the property in order to prepare a Schedule of Dilapidations compliant with the RICS Guidance Note 7th Edition September 2016 and also the PLA Pre-Action Protocol.
- Claim Negotiation with Tenants: depending upon the timing of our appointment the Tenant typically will either choose to undertake the work themselves or negotiate a financial settlement.
- Should the Tenant choose to undertake the works we will monitor the works on behalf of the landlord so to ensure that these works are being done to the appropriate scope and standard. Following completion, we will inspect the works and where required prepare and issue a residual dilapidations claim for address by the tenant.
- Should the tenant not wish to undertake the works, or have missed the opportunity to undertake the works we will enter into pro-active negotiations with a view to securing the ‘best’ and ‘right’ deal for the Landlord.
- With the claim settled and monies secured. Our multi-disciplinary team are able to design, procure and manage the implementation of the dilapidation works on behalf of the Landlord.