Dilapidations: 10 things to consider
Dilapidations: 10 things to consider
4th November 2021, 2:01 pm
The last eighteen months or so has seen plenty of discussion about getting back to how things were before the Covid-19 pandemic started in the UK. The ‘new normal’, as many have termed it. When it comes to the area of construction, buildings, building surveying, and in particular Dilapidations, it’s crucial that a leading building surveyor is collaborated with, so that the ‘new normal’ doesn’t include new, nasty, expensive surprises.
The word ‘Dilapidations’ itself is one that screams of negativity. How often have you heard of a property described as “being in a state of dilapidation”? It’s not something that you want to hear either as a landlord or as a tenant when you are involved in the lease of a property.
Here, Jonathan Cornes gives us the benefit of his 23 years of experience in building surveying with his 10 key points about Dilapidations.
Tip 1. Find out what Dilapidations are
A Dilapidation is basically a term used when referring to the condition of a property during it being occupied or at the end of the lease. The term refers to a state of disrepair in a property where there is a legal liability for the condition of disrepair.
Tip 2. Know how Dilapidations can affect you
As a landlord or tenant, it’s all about minimising risk, knowing the full picture, and not receiving any nasty unexpected surprises.
Dilapidations affect you because they are part of a legal process based on any breaches of covenant in the lease relating to the condition of the property, and the repairs required during or at the end of a commercial lease can include:
- Full reinstatement back to the original layout
- Statutory covenants
Tip 3. Find out the implications for you from Dilapidations issues
Because dilapidation issues occur when tenants are found to be in contravention of their leasehold obligations, there can be substantial costs involved, and the process can be lengthy and contentious. It’s a process where we know that protection and peace of mind are of paramount importance. That’s where an excellent building surveyor comes into the equation…
Tip 4. Know why Dilapidations can be expensive
Dilapidations are enforceable in a court of law, plus landlords and tenants will often interpret disrepair in an entirely different way, and the legal interpretation of lease clauses can vary on a case-by-case basis.
Tip 5. Here is what you should be looking for in a building surveyor when it comes to Dilapidations?
With dilapidations, you’ll need a building surveyor with a depth of knowledge with regards to leases and building legislation, case law and protocol. A company with experience, expertise and an outstanding track record in this field, and one that works specifically to the Royal Institution of Chartered Surveyors (RICS) code of practice.
A reputable building surveyor will help you to gain peace of mind by knowing that your interests are protected to the highest level by the experts. The building surveyor’s support will allow you to evaluate your position clearly, ensuring that successful conclusions are reached when there is a claim for dilapidations.
Be you a landlord or a tenant – you might want to ask yourself some or all of the questions below…
- Don’t you want to minimise possible costs and reduce worry?
- Have you considered worst case scenarios for the property at the start, during, or coming towards the end of a lease?
- Do you really want to be looking at extensive and lengthy property repairs?
- As a landlord, how difficult would it then be to get new tenants in there because of the above?
Tip 6. Be prepared – get a Schedule of Condition
We think that a strategic approach to Dilapidations is the key to avoiding situations that you really do want to avoid. For landlords and tenants, this means thinking seriously about Dilapidations liabilities before a lease is signed. A building surveyor’s advice and opinion can therefore be invaluable at the outset, and we commonly work alongside solicitors in agreeing the lease terms to protect all parties concerned.
When it comes to being prepared, we think that a Schedule of Condition is a must. This is a detailed recording of a property’s condition which is appended to the lease for use at future time to establish the previous condition of the premises. This is a great way for both the landlord and tenant to mitigate dilapidations disputes at the end of, or during, the lease.
Tip 7. Know what an Interim Schedule of Dilapidations is – and get one.
It’s a little like having a mid-term service carried out on your car. It gives you peace of mind or alerts you to problems at an early stage in the leasing process.
Tip 8. Knowing that an Interim Schedule of Dilapidations gives you plenty of information and answers.
It puts you at ease with hugely important questions like:
- Is the building being adequately maintained?
- Have there been complaints from other occupiers?
- Is there a risk of the tenant going insolvent?
- Will there be a potential loss in value?
- Will my insurance be invalidated?
Tip 9. Get some practical examples of Dilapidations cases
We have plenty online at www.jcassociates.co.uk where we have represented landlords and tenants. These give you an excellent guide as to some of the processes and problems that are associated with Dilapidations. For all other information – simply contact us or your building surveyor.
Tip 10. What to do next?
As we have said previously, you really do need to be working alongside a company that has a depth of knowledge and understanding in the relevant property legislation and case law. One that works specifically to the Royal Institution of Chartered Surveyors (RICS) code of practice, ensuring that you’re fully compliant.
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