Recently, here at RB Surveyors, we have robustly defended an astonishing £215,000.00 dilapidations claim. A dilapidations claim is common in both private and commercial tenancy, but it is something that is often misunderstood, overlooked or often handled inappropriately.
So, what is dilapidations and how did we help reduce such a monumental claim?
What is Dilapidations?
A dilapidations is an item of disrepair, defect or break in the terms of a lease which tenants need to either rectify or pay following the end of a lease. A landlord typically has 56 days’ post-lease ending in order to bring up these claims.
The landlord is able to recover reasonable costs of repairing any damages, though it is capped at the decrease in value of the property as a whole. The loss of rent over the course of any repairs being conducted can also be recovered. Tenants are liable to pay these costs post-tenancy, per their signing of the letting agreement.
It is advisable for tenants to seek dilapidations advice before the end of their tenancy, in order to help avoid these costly settlements.
Following the natural lease expiry on this 9,500.00 sq ft retail unit, the landlord had served a terminal schedule of dilapidations.
We reviewed the Lease, attended the site to carry out an inspection and scrutinised the claim. Using our knowledge and expertise, we considered a number of factors that would impact on the claim. These are the state of the building post-lease and the content of the lease, primarily.
Further to our investigations, negotiations began and were nearing a satisfactory conclusion. As part of our thorough service, we carried out a final search and located a planning application outlining the landlord’s intention for the property. Our due diligence investigations and procedures highlighted the application that had been submitted that week. We identified several areas of supersession which significantly affected the landlord’s claim.
Effectively, the landlord had made plans to refurbish the property. But, these plans would have been imposed over any renovations that the tenant could have made to lessen the dilapidations that were claimed.
These supersession plans negated the claimed loss and allowing us to omit the sums from the settlement figure. Finally allowing us to negotiate a full and final settlement of £65,000.00, which represented a significant saving of circa 70% for our client. This was an incredible outcome for our clients and part of our dedication to delivering excellence across the board.