Dilapidations – A guide to what they are and how to deal with them

What is a dilapidation? 

This is the process a landlord needs to follow to recover any loss that has occurred as a result of the tenant failing, at the end of the lease, to return the property having reinstated any items of disrepair or damage according to the repairing standard. It is basically an exit cost for the tenant and relates to restoring the property back to its original state. Dilapidations relate to commercial properties. 

 

When can a dilapidations claim be made? 

A landlord can make a claim for dilapidations via a claim document often called a Schedule of Dilapidations and this will contain references to breaches of the tenant’s lease obligations. Dilapidations claims made by a landlord can be made during or after the period of the lease. 

 

How much can be claimed? 

The amount can exceed the tenant’s annual rent. However, there is a limit based on the reduction in value of the property resulting from the dilapidations. 

 

When should I start thinking about dilapidations? 

The earlier the better. When you first look at a property ensure you are clear about what you are taking on and what areas under the lease you are responsible for. Ensure you have a Schedule of Condition so you and the landlord are both clear about the condition of the property right from the start. 

 

What should I do next? 

Keep clear records of all relevant documents and be clear to follow all lease requirements getting written permission where required for any alterations. Ensure the property has been well kept. If you receive a Schedule of Dilapidations then you should contact a solicitor or building surveyor. They will work out the real extent of the case and your liability. It may be the case that the landlord is asking for repairs to take place that in fact are not your responsibility once the document has been viewed by a legal expert. 

 

Dilapidations can be confusing so if you are at all unsure please contact us and our commercial property legal experts will be able to advise you. 

 

Contact us on 0113 200 7480 or email us on info@averywalters.com.