Dilapidation Settlements
Myles Elliott acting for Landlords or Tenants in Dilapidation settlements.
Commercial leases normally contain repairing covenants requiring the tenant to keep the leased property in repair.
The wording of the repairing clause is paramount, as the liability may include only the internal parts (an 'internal repairing lease') or the interior, exterior, structure, services and grounds etc - (a 'full repairing lease'). The degree of repair or renewal being required is the subject of much case law!
Leaseholders often do not fulfill these obligations and need to be reminded during the term of the lease. In particular, during the last year of the term, the lease needs to be enforced by the serving of a Schedule of Dilapidations. A Chartered Building Surveyor prepares this document, reading and interpreting the lease, visiting the premises to survey its condition and then making a detailed report to a recognized format and standard; “The Schedule of Dilapidations”.
If the tenant still does not fulfill his obligations and vacates at the end of the lease, leaving the property in disrepair, then the landlord may seek recovery of his costs in carrying out the necessary repairs and redecorations - these costs will include any professional fees incurred for preparing the Schedule of Dilapidations and negotiating the settlement and also will include any legal fees for service of notice etc.
The landlords may also include claim for loss of rent, rates and for outstanding service charge contributions etc for the period that the property remains un-lettable and/ or repair works are being undertaken.
Landlords should take advice on dilapidations well in advance of expiry of the lease to ensure their interests are well protected. In all but the simplest cases, the Building Surveyor will need to work closely with an experienced dilapidations Solicitor to ensure that the client's interests, be that of the landlord or tenant, can best be protected.
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