Dilapidations - Don't get tripped up
James Acock Lease Advisory & Business Rates
Dilapidations - Don't get tripped up
James Acock Lease Advisory & Business Rates
What are dilapidations for?
Landlords should be compensated if the tenant breaches the lease clauses regarding repairs, decorations, reinstatement etc.
The tenant either puts the property back into repair with alterations reinstated in compliance with their obligations, or they pay the landlord a suitable, agreed, cash sum in lieu of leaving their premises ‘dilapidated’.
What could go wrong?
That depends upon how and what is written into the lease.
It also depends upon a a landlord's intentions once the premises are returned vacant. There are limits on what landlords can recover as ‘damages’ if the tenant does not carry out the necessary repairs (as enshrined in the Landlord and Tenant Act 1927), i.e. if no provable loss, then no legitimate claim.
Here are some trips and tips
And above all, plan ahead
Above all, be aware that the tenant's responsibility is to repair the property, not improve it. But disputes may arise over whether works amount to repair or improvement – this may impact on how the premises may be returned and proposed remedies available to you.
Drafting the lease at the outset with well-defined dilapidations clauses is recommended, to maximize a dilapidations claim and avoid compromises and potential litigation down the line.
Plan your strategy well ahead of the lease expiry. Consider factors such as market trends and your refurbishment prospects and the tenant’s objective, all of which will steer the direction of travel of the dilapidations claim.
What should I do next if I have a Dilapidations claim?
We have put together a helpful guide, that if followed, should reduce future capital expenditure and improve asset performance.
