Residential Property Management and Home Survey Specialists
Schedule of Dilapidation Practice
It can come as a nasty shock towards the end of a lease (or even after) when the landlord requires extensive work from the tenant to remedy damage or disrepair or to put the premises back in their original state if the tenant has made internal alterations. If the tenant does not carry out this work, he or she may be required to pay the cost of having it done.
As a tenant you may be able to challenge the landlord's list of required repair work, referred to as a schedule of dilapidations. But to be in a strong position to mount a challenge you need to consider the dilapidations question right at the outset of the lease with the help of your Chartered Surveyor.
What Are Dilapidations?
The term is normally used to cover defects or disrepair which you as tenant will be required to deal with or pay to have remedied when you vacate the premises that you have leased.
When Do I Need To Start Thinking About Dilapidations?
Before you take a lease. A survey will establish the condition of the premises, giving an indication of work that may be needed, both immediately and later. If the premises are already in bad repair, special considerations apply (see below). During the term of the lease, regular or planned maintenance can avoid greater expense later.
What If The Premises Are In A Poor State At The Outset?
Most commercial leases require the tenant to put and keep the property in repair (even if the lease clause seems to say 'keep'). Unless you and the landlord specifically agree otherwise, the fact that the premises were in a poor condition when you took them on is irrelevant - you still have to put them right. So negotiate for a lower premium or a lower rent to compensate for costs that you face.
Alternatively, persuade the landlord to agree that the premises be returned at the end of the lease in a condition similar to the state in which you took them. In this case, after you have had the premises surveyed, make sure that the condition is established, recorded and attached to the lease as a "schedule of condition". This is best undertaken by your Chartered Surveyor, agreed with the landlord and appended to the lease.
When Is The Landlord Likely To Submit A Dilapidations Claim?
Generally speaking, landlords do not serve dilapidations claims earlier than three years before the end of the lease. If you, as tenant, have a statutory right to a new lease, the landlord probably will not serve a dilapidations claim unless or until you indicate that you are unlikely to renew your lease
What Is The Position On Alterations I Have Made?
This depends on the terms of the lease and any licences that the landlord granted you to make alterations. On granting consent for alterations the landlord probably required that at the end of the lease you restore the property to its original state if requested to do so.
Therefore, unless the landlord thinks your alterations have added value, you will probably be required to reinstate the property at the end of the lease or pay the cost. The exception is if neither the lease nor the licence for alterations gives the landlord the option of requesting reinstatement.
Do I Have To Accept The Landlord's Dilapidations Claim In Full?
No, do not accept it without taking professional advice from your Chartered Surveyor. The cost may be inflated or the claim may include items which are not valid items of disrepair. And possibly the landlord may not in fact intend to repair the property; he or she might plan to demolish it. In this case you would have a good defence at law to the claim.
What If I Cannot Reach A Compromise With The Landlord?
If you cannot reach agreement, the landlord has recourse to the court. But this is a slow process and expensive for both sides. Landlords will generally avoid it if they can. Consult your solicitor as well as your chartered surveyor if things look like taking this course - in a court hearing your chartered surveyor will be able to act as an expert witness on you behalf.