Dilapidations - Surveyor's View

Published on Wednesday, February 1, 2006

What is Dilapidations?

•          Breach of repairing covenant

•          Breach of decorating covenant

•          Failure to reinstate

•          Failure to comply with statutory requirements

Covenants to repair

•          Full repairing

•          Internal repairing plus service charge / recharge

•          Pure internal repairing

Covenants to decorate

•          Usually every 3 or 5 years

•          Last year or 6 months

•          Standard specified in the lease

Reinstatement

•          Alterations

•          Partitioning

•          Mezzaine floors

•          Alterations to services

Statutory Requirements

•          Control of asbestos in the workplace regulations

•          Fire alarm

•          Electrical certificates

•          Gas

•          O & M Manuals

Schedules of Dilapidations

•          Notices of Disrepair

•          Interim Schedules

•          Terminal Schedules

Schedules of Condition

•          Property in poor condition at start

•          Not reinstate to any better condition at end of lease

•          Only as good as the schedule

•          Not the entire answer

Terminal Schedules

•          The lease and other documents

•          Inspection

•          Preparation of the Schedule

i.          Lease covenants

ii.          Alleged breaches of covenant and remedial actions split between the 4 types of breach

iii.         Estimated cost of remedying the breaches

iv.         Ancillary Heads of Claim

Negotiation and Settlement

•          OPTIONS

i.          Do the Work

ii.          Negotiate and settle the claim

iii.         Court or Mediation if unable to settle

•          Dilapdations protocol

•          Scott schedule

 
Limit of Liability

•          Supercession

i.          Demolition

ii.          Alteration

iii.         Refurbishment

iv.         Improvement

Section 18 Landlord and Tenant Act 1927

•          Landlords loss limited to diminution in the value of the freehold reversion.

•          How is diminution assessed?

•          In repair / out of repair valuations.

SUMMARY

•          IF YOU ARE A TENANT:

i.          Consider a Schedule of Condition

ii.          Don’t overlook your repairing obligations during the lease

iii.         Obtain landlord’s approval for alterations

iv.         EMPLOY A SURVEYOR!

•          IF YOU ARE A LANDLORD

i.          Make sure you enforce lease covenants and avoid difficulties with incoming tenants

ii.          Adhere to the protocol

iii.         EMPLOY A SURVEYOR!

For further information please email Mark Pepper or call 01908 678800.