In the case of either a commercial or residential lease there are usually obligations imposed upon the Tenant to keep the building (or a part) in good and tenantable condition. Dilapidations is a general term which covers a breach of covenant to repair a building or a part of a building, which is included in a Lease.
A Tenant usually has an obligation to keep premises in a good and tenantable repair throughout the term of the Lease and if they fail to do so the financial implications can be very serious. A Tenant should contact a Chartered Surveyors either during the course of a Lease and almost certainly towards the end of the Lease term in order to seek advice on any dilapidations liability which may arise. When a Tenant has been served a Schedule of Dilapidations by the Landlord or the Lease is nearing its end, it is imperative that the advice of a Chartered Surveyors is sought at the earliest opportunity.
It is also advisable for a Tenant who is contemplating entering into a Lease on full (or partial) repairing terms, to seek advice of a chartered surveyor in order to commission either a Building Survey or a Report upon Condition.
A Landlord, on the other hand, may serve a Schedule of Dilapidations upon a Tenant if there are matters of disrepair associated with the building or a part of the building which forms the subject of the Lease. A Schedule served during the currency of a Lease (whilst it has more than three years of the term remaining) is known as an ‘Interim Schedule’, whereas a Schedule served within the last three years of the term is commonly known as a ‘Final’ or ‘Terminal’ Schedule of Dilapidations. The right of a Landlord to serve an Interim Schedule is far more restrictive than that associated with a Final Schedule of Dilapidations and is governed by the provisions contained in the Leasehold Property (Repairs) Act 1938.
The Landlord’s claim for damages in respect of a Final Schedule could include not only the cost of remedial works but also “consequential losses” such as loss of rent, insurance, service charges, rates, professional fees and VAT which arise directly from the Tenant’s breach of covenant.
Every Dilapidations case is different for the simple reason that every property varies to some extent not only in its location and design but how it has been cared for during the term of a Lease. We also act on behalf of Landlords and Tenants in respect of negotiations to settle a claim for dilapidations and, when necessary, act in the role of Expert Witness in providing evidence to a court, tribunal or other third party adjudicator.
David Cooper Associates Chartered Surveyors has longstanding, detailed and wide experience in acting on behalf of Landlords in the preparation of interim and final Schedules of Dilapidations and on behalf of Tenants in response to Schedules which may have been received either during or at the end of the Lease.