Dilapidations

Dilapidations

Managing Lease Obligations and Dilapidations Claims

Overview

When signing a lease, tenants are usually responsible for keeping the property in good repair, reversing any changes they have made, and maintaining it in a well-presented condition. Over time, these responsibilities can lead to significant costs if not managed carefully.

Doyen Partners has extensive experience supporting both landlords and tenants in negotiating and resolving dilapidations claims, helping to achieve fair and practical outcomes for all parties.

For Landlords

We regularly review lease documentation and prepare interim and terminal schedules of dilapidations for service on tenants. The schedule is based on the Scott Schedule and provides a breakdown of alleged breaches of the lease, proposed remedy and associated costs. The schedule further provides a summary of consequential losses arising from the breaches to form the landlord’s claim.

For Tenants

We have represented a number of tenants in fighting claims and negotiating a settlement following the service of the landlord’s claim following the determination of the lease, and have advised and managed the completion of works by the tenant to satisfy their obligations prior to the end of the lease term.

We always recommend that Tenants commission an acquisition survey (ideally by us) to assess the condition of the Property and the liabilities they would incur once they enter into a lease. Where there are items of disrepair we would prepare a Schedule of Condition to append to the lease to ensure that they are not responsible for repair those pre-existing defects.

In addition we have advised Tenants of their dilapidations liabilities to inform their financial planning and forecasts.

Our approach

We take a wide-ranging view of dilapidations claims and consider the nature of the building and likely landlord intentions as there are a number of scenarios where the landlord’s claim can be significantly impacted.

  • Where there is redevelopment of the property,
  • Supersession of tenant’s works where the landlord carries out improvements to the building which go beyond the tenant’s repairing liability, and
  • Where the landlord does not carry out works their claim is limited to the diminution in the value of the reversion Section 18(1) of the Landlord & Tenant Act 1927. That is to say the difference between the Market Value in its current condition and what it would be had the Tenant properly maintained it.

Because of rapidly evolving market demands and conditions, including the gradual increase in Minimum Energy Efficiency Standards (MEES), the potential for supersession or outright redevelopment is high and if argued correctly saves our clients significant sums.

Representative projects

Explore

More Services