Dilapidations State of Shock
If you are taking on a lease this could be used in x number of years time
This is a brief explanation regarding what happens with regard to leases and Dilapidations if as a tenant you do not protect yourself or if as a landlord you do not protect yourself.
If you would prefer to chat to us directly please do not hesitate to call us on free phone 0800 298 5424 for a friendly chat with building surveyors who are experienced in Dilapidations, Schedules of Condition, Commercial Structural Surveys and Building Surveys.
Landlord serves Dilapidations on small shop
We have met up with a fairly regular client of ours who runs a shop in a High Street location who genuinely looked in a state of shock having just had hefty Dilapidations notice served upon him by the landlord.
We say hefty and it is in the tens of thousands of pounds although it is approximately half what we would typically expect for the type of property.
The shop premises had been left in good condition
According to our client the shop is now in far better condition than when they originally took on the property and also various items had been added such as an improved kitchen area and toilet facilities. Genuinely the tenant believes that the landlord is getting back a much better building.
The Dilapidations story in more detail
Let us explain for those of you new to Dilapidations that when you take on a lease of a shop you take on the lease with certain conditions that are known as covenants. The covenants generally relate to what we know as the 4 R 's:-
Statutory R egulations
as well as a Break clause
With this particular case the Break clause had been brought into action by the tenant as he believes that he could lease better premises elsewhere. The lease is not at the end of the lease but is part way through and as such the covenants still apply.
We are often in a situation where the landlord expected his building to be leased for many more years to come and then has a building to Let.
Lease and Schedule of Condition
With this particular client we recall when they took on the property as we were involved with carrying out a Schedule of Condition which they duly had appended to their lease thereby limiting their liability.
Schedule of Condition Example
Why have a Schedule of Condition?
By having a Schedule of Condition carried out and appending it to your lease we would say that this limits the cost of Dilapidations claims. In our experience when landlords still claim the claims are half of what they would claim without a Schedule of Condition. In theory the claim should be a zero claim. Remember Dilapidations claims are typically tens of thousands of pounds upwards. If you have the benefit of a Schedule of Condition this costs a relatively small percentage of a Dilapidations claim helping to protect you.
Break clause has been taken but still there is a Schedule of Condition
However in this case even though a Schedule of Condition has taken place the tenant still has had a Dilapidations claim served upon him which is why when we met him he was in a state of shock. Our client believed that the Schedule of Condition would completely remove any liability.
Dilapidations Claim Example
We are now going through the Dilapidations claim following The Royal Institution of Chartered Surveyors (RICS) Guidance Notes for Dilapidations and also The Dilapidations Protocol. It is clear that the Surveyor who has carried out the Dilapidations Schedule has neither seen the Schedule of Condition or has chosen to completely ignore the Schedule of Condition.
We have spoken to our client who advised that the landlord's Dilapidations Surveyor was in the shop (although we are calling the premises a shop it is in fact a professional practice) for less than twenty minutes. This time frame gives you an idea of the size of the shop and also possibly gives you an idea of how much detail the landlord's Dilapidations Surveyor went into.
Speak to the Dilapidations Surveyor
We carry out reports that give Strategic Advice in this situation and as part of these reports we speak to the Dilapidations Surveyor up to three times to establish their knowledge and understanding of the particular case. In this instance, the landlord's surveyor had not seen the original Schedule of Condition (as the landlord nor the landlord's solicitor had not provided the surveyor with this document). Our impression was that the Dilapidations Surveyor did not give his client, the landlord, Strategic Advice.
Cause for concern when the Dilapidations Surveyor does not follow the Dilapidations Protocol
The first matter a Surveyor will do is to get a copy of the lease and read this then secondly the Surveyor will read the lease again!
However, we have come across this scenario many times where a Surveyor due to time limitations or other factors has carried out a Dilapidations Schedule without reading the lease.
If you are having Dilapidations problems or the above rings a bell then do not hesitate to contact us on free phone 0800 298 5424 for a friendly chat on about Dilapidations and property management issues.
Please see our Dilapidations articles on:
Examples of Dilapidations
Please contact our office; we may be able to give you examples of Dilapidations cases that we have dealt with similar to yours and help you understand how to deal with your particular issue.
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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