Dilapidations
Dilapidations are breaches of leases due to the condition of the property being leased, either during or at the end of the lease period. This may result from mistreatment of the property or poor or absent maintenance or repairs that are required by the lease. Further work may also be required at the end of a lease to reinstate alterations that have been made to the property by the tenant.
Tenants should be clear about their responsibility for dilapidations and reinstatement when signing a lease or carrying out alterations and should budget and account for any necessary works during the course of the lease. If they fail to do this they face the prospect of unexpected, or unaffordable works, or having insufficient time to carry out the works before the end of the lease.
If the required works are not carried out, the landlord may issue a schedule of dilapidations, or a notice to reinstate near the end of the lease (or an interim schedule during the course of the lease).
If dilapidations works are not carried out by the end of the lease, the landlord may claim damages from the tenant (a terminal dilapidations claim). This may take the form of a ‘quantified demand’ setting out details of the landlord’s losses as a result of the dilapidations, which may include loss of rent due to repairs being carried out. However, the landlord cannot profit from this claim, so if for example the landlord does not intend to reinstate the property, this must be taken into account.
These issues may result in a period of negotiation between the tenant and landlord in an attempt to agree a settlement figure. If the negotiation process fails then alternative dispute resolution or court proceedings may be necessary.
The valuation of works required, or the loss of value to the property can be complex calculations, and so both parties may wish to appoint surveyors to offer advice and prepare the appropriate documentation. Further specialist advice may be necessary for complex components or aspects of a property, such as building services plant. Court proceedings may also involve expert witnesses.
A ‘Pre-Action Protocol for Claims for Damages in Relation to the Physical State of Commercial Property at Termination of a Tenancy’ (the 'Dilapidations Protocol') is available from the Ministry of Justice. This describes the conduct the court expects the parties to follow before commencing proceedings, setting out a process and timetable for the exchange of information, and establishing standards for the content and quality of schedules of dilapidations and quantified demands.
There is a separate Pre-Action Protocol for Housing Disrepair cases.
[edit] Related articles on Designing Buildings
- Alternative dispute resolution.
- Betterment.
- Break clauses in leases.
- Decay.
- Dilapidations claim.
- Deterioration.
- Dilapidations protocol.
- Forensic engineering in developing countries.
- Lease Negotiations - Tenants Checklist.
- Licence for Alterations for Apartment.
- Licence to alter.
- Opening up works for inspection and testing.
- Payment for dilapidations.
- Quantified demand.
- Rent-free period.
- Rent in administration.
- Rent review.
- Reversion.
- Sample retail lease.
- Schedule of condition.
- Schedule of dilapidations.
- Scott schedule.
- Supersession.
[edit] External references
- RICS, A clear, impartial guide to Dilapidations For use in England and Wales. November 2013
- Ministry of Justice, Pre-Action Protocol for Claims for Damages in Relation to the Physical State of Commercial Property at Termination of a Tenancy.
- Ministry of Justice, Pre-Action Protocol for Housing Disrepair.
Featured articles and news
Investors in People: CIOB achieves gold
Reflecting a commitment to employees and members.
Scratching beneath the surface; a guide to selection.
ECA 2024 Apprentice of the Year Award
Entries open for submission until May 31.
UK gov apprenticeship funding from April 2024
Brief summary the policy paper updated in March.
For the World Autism Awareness Month of April.
70+ experts appointed to public sector fire safety framework
The Fire Safety (FS2) Framework from LHC Procurement.
Project and programme management codes of practice
CIOB publications for built environment professionals.
The ECA Industry Awards 2024 now open !
Recognising the best in the electrotechnical industry.
Sustainable development concepts decade by decade.
The regenerative structural engineer
A call for design that will repair the natural world.
Buildings that mimic the restorative aspects found in nature.
CIAT publishes Principal Designer Competency Framework
For those considering applying for registration as a PD.
BSRIA Building Reg's guidance: The second staircase
An overview focusing on aspects which most affect the building services industry.
Design codes and pattern books
Harmonious proportions and golden sections.
Introducing or next Guest Editor Arun Baybars
Practising architect and design panel review member.
Quick summary by size, shape, test, material, use or bonding..
Comments
[edit] .To make a comment about this article, or to suggest changes, click 'Add a comment' above. Separate your comments from any existing comments by inserting a horizontal line.