Most occupied commercial properties are subject to lease agreements between the Landlord and the Tenant. The lease will include certain repairing covenants which require the Tenant to maintain the property to a certain standard during the term of the lease and return it in a pre-defined condition on the expiry or early termination of the lease.
The term dilapidations refers to the various breaches of the covenants regarding condition and describes the process to rectify the breaches. Most Tenants are unfamiliar with the dilapidations process and often only learn of their liabilities under the lease when the Landlord serves a schedule of dilapidations on the Tenant. The Tenant has no right to occupy the property or rectify any breaches once the lease date expires, and often there is insufficient time to rectify the defects outlined in the Landlord's schedule of condition.
We always recommend our clients, especially those seeking to exercise a break clause in the lease, to be pro-active and to engage a dilapidations expert to prepare a schedule of dilapidations in good time so that all defects can be addressed before the expiry of the lease. If the Tenant fails, or is unable, to address all breaches of the covenants before the end of the lease, they will potentially be liable for all associated costs incurred by the Landlord. In the instance of terminal dilapidations, at the end of the lease, the sum claimed should not exceed the reduction in value of the property due to the dilapidations. In the event of a break clause, failure to return the property in the correct condition will often make the break clause null and void, and the Tenant will remain liable for the rent and condition of the property until the expiry of the lease. We strongly recommend you contact us to discuss the process in more detail and to assist you with your dilapidations liability if you are near the end of your lease or looking to exercise a break clause.
We also provide dilapidation services for Landlords, assisting them with the preparation and proper service of schedules of dilapidation and negotiation of a settlement with your Tenant. As expert building surveyors, where the Tenant fails to rectify the dilapidations in time, we can also obtain competitive quotes for the necessary remedial works to your property and oversee the works to ensure they are undertaken to a good standard.
If you are a Landlord or Tenant and you have any dilapidation queries or concerns please contact us to discuss matters in more detail.