Beginner's Guide for tenants on
Leases and Dilapidations on
This is a brief explanation regarding what happens when you lease a property and subsequently if a Dilapidations claim is made against you. It is very difficult to summarise Leases and Dilapidations into a few pages and this is one of several articles we have written this being the introductory article. If you would prefer to chat to us on the phone for a friendly chat please call us on free phone 0800 298 5424. It is also worth having a look around our website to see if there are any other articles which may be of help to you and by all means print a copy for bedtime reading!
An explanation of Leases and Dilapidations in a few words
When you rent a property to run your business from you also agree to abide by a set of rules (covenants) as well as paying rent which is particularly important when you hand the building back. If you do not adhere to the terms of the lease a claim is made by the landlord against you which is called a Dilapidations claim or also known as a Dilaps claim. This is such big business that we would say that some landlord's almost specialise in Dilapidations as do some Surveyors and some Solicitors.
Dilapidations claims are as certain as death and taxes
A Dilapidations claim by the landlord is as certain as death and taxes although it often comes as a shock to the tenants or lessee due to the amount of money that the claim is for and costs. Remember the rules (covenants) within the lease make you legally liable to carry out the various requirements and as such it is a semi legal process that you will be involved with if you negotiate with regard to the Dilapidations claim.
Typical damage found within offices
Ceiling tiles missing and water damage
Dilapidations is legal action against you based upon the Lease requirements.
You cannot simply just walk away from the building and remember the longer it takes you, you are normally running up costs that you are liable for both your own costs and the landlord's costs in a typical lease. Some would argue that this is unfair but this is generally what happens. You may be liable for example to carry out repairs and redecoration for the building and also to insure the building as well as being liable for loss of rent and a whole host of other items that keep rising in cost the longer you take to settle the matter.
Usually you are also liable for the landlord's solicitors too and remember solicitors are never cheap.
How can you avoid Dilapidations claims against you?
If you have had a Dilapidations notice served on you then you need to talk to a Surveyor as soon as possible to establish you liability. It will be a different procedure if you are coming to the end of a lease to that if the lease has already ended.
Please see our surveying articles on:
Ways Surveyors can help you save money
Have your own Schedule of Condition carried out at the start of a lease
Surveyors can help you by protecting you at the start of the lease and preparing Schedules of Condition which detail what the property looks like limiting your liability.
Have your own structural report and strategic report carried out to help you negotiate
Specialist Dilapidations Surveyors can also provide a Structural Report to help you negotiate on the price you pay.
Strategic advice on getting out of your lease
If you contact us before the lease ends we can advise you how best to limit your future liability by reviewing the lease conditions and advising on what repairs, redecorations and other actions you have and have not got to carry out.
Strategic advice at the end of the lease and item by item negotiations to limit your liability
If the lease has ended we can help you to negotiate following the legal Protocol for Dilapidations. We can carry this out with hands on or hands off approach dependent upon how you wish to work.
The Dilapidations Protocol and the Dilapidations Guidance Notes
It should be remembered that the Dilapidations process is a semi-legal process and as such Surveyors will follow the Dilapidations Protocol. If the Surveyor is a Chartered Surveyor they will also be following the Royal Institution of Chartered Surveyors (RICS) Guidance Notes with regard to Dilapidations. There are various time perimeters within the Protocol as well as ways of working.
For example a Dilapidations claim should be served 56 days after termination of the lease and the response being within 56 days of receiving the Dilapidations claim.
What does a Dilapidations Schedule look like?
Dilapidations literally goes through item by item every problem and defect in the building that means the way you are handing back the building does not meet the lease requirements. Dilapidations literally identifies every mark and scratch to every door, every old fixing point and opening to the walls, any cables that remain that were not there originally with you being required to remove/repair; these will be relatively small sums but will add up to many thousands of pounds. We have seen this occur time and time again.
Free phone us for a friendly chat on 0800 298 5424 about Dilapidations and property management issues. We would also be happy to email you some examples of our tailor made reports, Schedules of Condition, Structural Surveys and Property Reports. We also find that Specific Defect Reports can be use where there is one problem or issue that needs resolving between the landlord and tenant.
We hope you found the article of use and if you have any experiences that you feel should be added to this article that would benefit others, or you feel that some of the information that we have put is wrong then please do not hesitate to contact us (we are only human).
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