Dilapidations relates to a claim for damages in respect the of the tenant's lease obligations for repairing, maintaining, reinstating and decorating the property. It is perhaps the most contentious area of building surveying and a topic that requires specialist knowledge of the law.
The purpose of these lease clauses is to ensure that the tenant maintains the property to the standard expected within the contract (lease). Unfortunately, many tenants do not take care of their landlord's property and therefore face a substantial dilapidations claim at lease end.
There are 3 types of dilapidations claim; Interim (mid-term), Terminal (lease end) & Final (post tenant works).
This occurs at lease end, and is usually served within the last 18 months of the lease. Terminal dilapidations surveys assess whether the tenant has complied with their lease obligations in relation to repair, decoration, reinstatement of alterations, statutory requirements and yield up (lease end) provisions.
Often the terminal schedule is priced based on estimated costs of putting the property in a lease compliant condition, or priced using quantified costings from a tender process.
A terminal schedule of dilapidations can be served up to 12 years following lease expiry.
Following the service of a schedule of dilapdiations the tenant may opt to undertake the repair and reinstatement work. A final schedule of dilapidations is prepared by the landlord's surveyor following these works. This report is to illustrate any residual or substandard works that still remain the tenant's obligation.
An interim schedule is served during the lease. An interim schedule can be served alongside a repair notice or a Section 146 notice. This schedule demonstrates where the tenant has failed to comply with their lease obligations in relation to repair, decoration, alterations and statutory requirements. The schedule is prepared by a chartered surveyor and usually accompanied by a notice to comply with the lease requirements within a certain time frame, or face the consequences contained within the lease.
Negotiation & Compliance
Dilapidations can be a sensitive area for both landlords and tenants. Surveyors often become mediators in settling claims. A dilapidtions surveyor must have a strong knowledge of the law surrounding this niche area, and a good understanding of construction.
Terminal claims are often negotiated outside of the courts but can end up in court should. Surveyors dealing with dilapidations must work in earnest and with conviction. They must be able to clearly demonstrate the pros and cons of a situation to their client and guide them through the process with their interest in mind. The best surveyors are those with experience and that are able to take a commercial view on matters to ensure that our clients do not get dragged into court unnecessarily.
Hab Consults provides reasoned advice and take a meticulous approach to inspecting properties, whether preparing or disputing a claim.