What is Dilapidations?

A dilapidations claim is a legal claim made by a landlord against a tenant at the end of a commercial lease.  “Dilapidations” refers to the disrepair to a property that the tenant is responsible for under the lease.  The items claimed for by the landlord will be determined by the exact clauses in the lease, though will typically include returning the property in the condition it was in at the start of the lease, including removal of alterations and layout changes.

At or near the end of the lease, the surveyor acting on behalf of the landlord will usually send a “schedule of dilapidations”.  This will list relevant repairing and yielding-up clauses in the lease; alleged breaches of those clauses; repairing works; and cost of those repairs. The recoverable losses for the landlord include cost of repair (diminution in value), loss of rent/service charge, and professional fees.  The landlord can only recover what they have actually lost because the tenant did not meet their lease obligations. There are limitations depending on the landlord’s intentions for the property.

The tenant may complete the works; the landlord may complete works themselves and claim the costs from the tenant; or both parties can agree a financial settlement.

Dilapidations claims in England and Wales are governed by the Landlord and Tenant Act 1927.  In Scotland, they are based on common law principles and the specific wording of the lease.  The RICS has issued a Dilapidations Guidance Note.

Most dilapidations claims are settled through negotiation between the landlord’s and tenant’s surveyors.  If the surveyors cannot agree a claim, mediation and litigation are further options.

At Walton Goodland, we have extensive experience in Dilapidations claims, having acted on behalf of landlords and tenants. Based in Carlisle, we cover the northwest, Cumbria, Lancashire, the northeast, Northumberland, and southwest Scotland. Should you have any queries or concerns regarding commercial leases, please contact our in-house building surveyor at admin@waltongoodland.com; or by calling 01228 514 199.

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