Expert View: What do you need to know about property dilapidations?
Nicholas Davies, commercial property solicitor at HRJ Foreman Laws Solicitors, Picture: HRJ Foreman Laws Solicitors - Credit: Archant
Dilapidations can be a major issue for landlords and a source of fear and mystery for tenants.
Nicholas Davies, commercial property solicitor at HRJ Foreman Laws Solicitors, highlights some of the most important things to know:
- Dilapidations is a catch-all term used to describe breaches by a tenant of the lease obligations relating to the condition of the premises such as repair, redecoration, putting back alterations and statutory obligations.
- Landlords can give the tenant a schedule of dilapidations detailing any breaches at the end of the lease (a "terminal schedule") or at any time during the lease ("an interim schedule").
- The landlord is usually entitled to recover the cost of producing the schedule from the tenant but often is given to the tenant within a specified period from the end of the lease.
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- Interim schedules will require the tenant to carry any work required within a reasonable period. If the tenant does not comply then the landlord will normally be entitled to carry out the works themselves and charge the cost back to the tenant, or terminate the lease.
If the tenant receives a terminal schedule in good time before the end of the lease they can do the necessary remedial works themselves, or return the premises to the landlord at the end of the lease without doing any works and try to negotiate a financial settlement instead.
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- If negotiating a financial settlement, both parties must attempt to reach a fair and reasonable settlement based on the cost of works which are necessary to restore the premises to their proper condition.
- The maximum amount the landlord is entitled to recover from the tenant is the amount by which the value of the property has been reduced because of the disrepair. This may not be as much as it would cost to carry out the repairs.
- If you are a tenant and you receive a schedule of dilapidations you should consult a solicitor who can advise you on the legal process and a surveyor who can advise you on the specific dilapidations referred to in the schedule of dilapidations. It may be possible to dispute many of the dilapidations alleged by the landlord in the schedule.
- Prospective tenants should consider dilapidations before they take on a lease. The specific wording of the lease obligations will make a big difference to the size of their dilapidations liabilities when the lease comes to an end (or sooner). Legal advice before entering into the lease is essential and a building survey may also be advisable.
Email info@hrjforemanlaws.co.uk or call Hitchin 01462 458711, Letchworth 01462 488333 or Welwyn Garden City 01707 887 700. www.hrjforemanlaws.co.uk
