NEGOTIATING DILAPIDATIONS CLAIM OF £1.41M AND ACHEIVNG SAVING OF 83%
Acting as retained surveyors for one of the largest national retailers in the UK, we were appointed to negotiate a financial settlement in respect of our client’s dilapidations liabilities. The premises formed part of a shopping precinct, situated on Marina Walk, Ellesmere Port.
The retail unit, extending to a GIA of circa 3,985 m² (42,894 Sqft), was let on a full repairing and insuring basis and the lease term had 6 months remaining.
Rather than sit and wait for the Landlord to serve a terminal schedule of dilapidations on our client and risk losing the option to undertake the works, we carried out an assessment of our client’s dilapidations liabilities. The report identified significant cost items associated with the roof, mechanical and electrical installations and general building fabric. Using our notional dilapidations assessment, we produced a comprehensive specification of works, which was then tendered to three reputable contractors.
By the time the Landlords surveyor had issued their terminal schedule of dilapidations, which amounted to £1,412,744, we were in position to instruct a contractor in the event that financial settlement negotiations could not be concluded prior to our ‘trigger deadline’.
Having demonstrated our client’s intentions to undertake the works, we were also prepared to commission a Section 18 (1) Valuation using specialist valuers. We contacted a local agent and he considered the property would be more marketable if the unit was sub-divided and let as two separate units. Such works would result in certain items of repair being superseded.
Our carefully considered and planned approach enabled us to put the Landlord on the back foot, which allowed us to robustly defend our client’s position against the Landlord’s dilapidations claim.
Consequently, we were able to negotiate a full and final dilapidations settlement at £237,500, which represented an 83% reduction of the Landlord’s original claim and a saving of £1,175,244 to our client.
Michael Brough, an Associate at RB Surveyors, had this to say about the success, “The appointment of a surveyor is often time critical and this case demonstrates that we were able to formulate an effective strategy and put the Landlord on the back foot from the outset.”