Dilapidations consultancy explained

Dilapidation is the term used to describe the state of condition and disrepair due to neglect in maintenance of a property. Dilapidations are the associated potential costs that could be due to the landlord from a tenant at lease expiry, to return the property back to its original pre-let condition.

It is strongly recommended that both parties consider dilapidations well in advance of the lease ending. The landlord should ideally serve a Terminal Schedule within the last year of the lease term to allow agreements to be reached, the appropriate works to be undertaken or a suitable financial settlement to be reached.

The tenant is normally obliged to leave the property as they found it. Everything should be rectified and brought back up to the required standard by the time they vacate the property to enable the landlord to re-let the property quickly and minimise the loss of rental income and other associated costs.

The tenant has the option to instigate the works themselves or alternatively, go down the financial settlement route with the landlord in lieu of undertaking the works.

If the tenant does progress the works themselves, they will need to employ a contractor to complete the works prior to lease end. To achieve this they will need to allocate an adequate time window to obtain quotes and plan for these works.

As well as dealing with dilapidations matters towards lease expiry, there is potential for issues to arise during the term, should the tenant not keep up the necessary repairs. Failure to do so can result in landlords choosing to issue Interim Schedules to ensure the building fabric is maintained.

If these are not adhered to by the tenant, the landlord can serve a Repair Notice to enforce the tenant to undertake ‘essential repairs’, although the tenant is afforded some protection by landlord and tenant law. In these circumstances, the landlord has the power to access the property, undertake the work and charge the tenant. This is a rare occurrence but one that needs to be fully considered by tenants.

Why would you need dilapidations advice?

Both tenants and landlords could find themselves in a position where they would need dilapidations advice.

For tenants - they may get to the end of the lease and either haven’t had time to put the property back to its original state and don’t intend to do so, or don’t believe they have any work to do.

For landlords - if a tenant vacates at the end of the lease term without restoring the property to its original layout and condition, this presents a problem for the landlord as it is unlikely that the property will be in an immediately lettable state.

What is dilapidations consultancy?

Dilapidations consultancy is the specialist service provided by professional buildings surveyors to both landlords and tenants as required, to navigate negotiations and reach a suitable resolution.

Tenants
Dilapidations consultancy is normally provided to a tenant following the receipt of a formal Schedule of Dilapidations from the landlord. The landlord will serve this schedule if they believe that the tenants have left their property in an unlettable condition and not restored to its original state as per the lease terms.

The firm acting for them will enter into negotiations with the firm representing the landlord to come to an agreement on either the extent of works the tenant will undertake to return the property to repair, or how much they will pay to enable the landlord to restore the property to an acceptable standard. There are often disputes between the two parties and both sides may have to compromise to reach an acceptable outcome.

In addition, surveyors can provide upfront advice in anticipation of a schedule being received from the landlord to establish the level of their liability and to allow them to plan their exit strategy.

Furthermore, surveyors are able to advise a tenant in respect of break notices, which are conditions incorporated within a lease allowing the tenant to end this early and vacate the property at pre-determined dates. These notices normally contain explicit conditions and it is vital the tenant is suitably advised to ensure the break is initiated allowing the lease to be terminated.

Landlords
Dilapidations consultancy is provided to a landlord to enforce the repairing liabilities of the lease and to ensure their property is returned to a repaired and re-lettable condition.

The appointed surveyor will be looking to mitigate the landlord's loss by gaining agreement of the extent of disrepair with the tenant/their surveyor to allow the tenant to either undertake the repair works themselves or pay a suitable financial settlement to reflect the landlord's loss. This payment could include, subject to the lease terms, surveyors’ and solicitors’ fees and potentially loss of rent and rates.

How long will it take to resolve?

There are many factors that could affect how long dilapidations claims take to resolve. How quickly the landlord serves the Schedule of Dilapidations, how long it takes the tenant to appoint a firm to act on their behalf and respond to the schedule, whether the tenant agrees to the proposed payment - or how strongly they disagree - all contributes to how long the claim will take to settle.

There are no set time parameters to conclude dilapidations negotiations but both parties, including their surveyors, are obligated to follow professional guidelines and protocol to ensure a suitable agreement is reached.

Our service to you

Whether you’re the landlord or the tenant, we will ensure that we achieve a positive result for you. Our surveyors are highly experienced and have the knowledge and expertise to guide you through the dilapidations process. We’ll avoid the jargon to ensure you understand what’s going on every step of the way.

Get in touch to find out more about the dilapidations consultancy service we offer. We’re happy to meet with you ‘virtually’ over video call or can arrange to meet in person when the lockdown restrictions are lessened and it is safe to do so.


NOTE:
Concerned about dilapidations negotiations during the COVID-19 period?

The COVID-19 pandemic could cause any number of problems and delays to those who are due to enter into or mid-way through dilapidations negotiations during this time. Companies may be uncontactable, might have temporarily closed or even gone into liquidation. If you are uncertain where you stand in the process and are looking for advice relating directly to dilapidations during this time, please get in touch. We can offer advice and guidance to set your mind at rest or arrange to kick off or continue the process for you if needed. Contact us today! 

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