Dilapidations                                                   

 [The final cost of Leasing, as you leave the Property]

Dilapidations are breaches of covenant to repair a building contained in a lease and breaches are the actual deterioration of the fabric and other Landlords fittings within the property. It should be noted that redecoration is a covenant which is time based and although part of the Dilapidations Claim it is not negotiable as other defects, and has to be carried out at the end of the Lease period. These defects are listed in a Schedule of dilapidations, prepared by the Landlords Surveyor, generally at the end of a Lease stating the defects and the cost of putting back to their condition at the start of the Lease.

How does it start, an entrepreneur has an idea and decides to rent a property so he/she can pursue a dream project and needs a place to set everything up, or has grown too big to stay in the original premise.

By now they are in a hurry to get into the property and to start on their idea as soon as possible, or they find a tenant is closing down and needs someone to take over his/her Lease.

All he knows is that he needs a solicitor to check the Lease for the obvious things like rent, covenants on break clauses, repairs, insurance, etc, but they are just words, and the solicitor never sees the property, so it is left to look after itself.

The condition of the property at the start of a Lease is of paramount importance to a tenant, and some surveyors do offer a Pre-Lease Inspection [which also means checking the Lease covenants] and providing the Client with the Defects and Costs liabilities he would be taking on, so he can negotiate with the existing Leaseholder before he/she takes over an Assigned Lease.

If not inspected, by a Surveyor, it can at the end of the lease bite him with costs he never dreamt of, and may not be able to afford, when he/she comes to the end of the project. Failure to agree or if there is a significant legal interpretation necessary, it can go to litigation.

The Property world is putting together a Dilapidations Protocol, which will ensure that the parties, encourage full disclosure of all matters relating to the Claim, assist in settling the Claims before considering litigation, and finally ensure efficient management of Claims in the event they do go before the Courts for settlement. 

A typical Dilapidations Claim and Tenant’s Surveyors reply can be found at: 

http://www.1stassociated.co.uk/dilapidations-report-landlords.asp

Quoin                                      [pseudonym of a Chartered Building Surveyor]