What are dilapidations?

What's included in the schedule of dilapidations?

These costs are typically attributed to putting the property back to its original, pre-let state, i.e. repairs or reinstating any cosmetic alterations. A ‘schedule of dilapidations’ is served to the tenant by the landlord. It can often come as an unwelcome surprise and it’s not uncommon for disputes to arise.

The schedule of dilapidations is the legal document landlords can issues to make a dilapidation claim against a tenant. It includes the clauses that outline the tenant’s obligations when it comes to the condition the property should be returned in and requests reinstatement of any alterations that have taken place during the term of the lease.

The schedule of dilapidations will also outline the work required to return the property, in accordance of lease terms, to its original condition, as well as a figure for the cost of carrying out the work. It’s not unusual for this figure to be equivalent to be a significant amount, which is why receiving a schedule of dilapidations can be such a nasty shock. However, it’s worth bearing in mind that the figure quoted to complete the work may not reflect what it actually costs to settle the claim.

How to prevent a large dilapidation claim

As the tenant, the process of protecting yourself against a dilapidation claim starts before the tenancy begins. The subtleties of the wording in your lease can have a significant impact on your liabilities, so make sure you read the terms of the lease very carefully and are clear about what you’re responsible for, it is recommended to seek legal advice at this stage if you’re unsure. It’s also worth asking for a ‘schedule of condition’ to be included as part of the lease. This detailed recording of the property’s condition when the lease begins can be very useful for limiting your liability.

If you want to alter the property during your tenancy, you may need to get written permission from the landlord first and follow the procedures as set out in the lease. You should also keep a record of any alterations you make and take photographs where possible. Finally, be sure to maintain the building regularly during your occupation to reduce the need for repairs.

WHEN CAN A CLAIM FOR DILAPIDATIONS BE MADE?

A landlord can make a dilapidation claim at any time during the lease, although it’s most common once the lease has ended or the lease is coming to an end. Technically, the landlord has up to six years from the end of the lease to make a claim. However, the Dilapidations Protocol, which sets out how landlords should make a claim, advises that claims are made within 56 days from the end of the lease.

Although it’s less common, dilapidation claims can also be made during a lease. This is usually the case if there’s a statutory lease renewal, a break clause, or if the disrepair of the property is affecting its value.

WHAT REMEDIES CAN LANDLORDS SEEK DURING A DILAPIDATION CLAIM?

There are four potential remedies available to landlords. The most appropriate depends on the particular circumstances of your case and the repairs required. The remedies include:

• Monetary damages – claiming a sum of money that compensates landlords for the disrepair
• Specific performance – it may be appropriate to ask the court for an order to compel the tenant to carry out the works.
• Forfeiture – terminating the lease where it has been breached – the right to forfeit must be expressly set out in the lease
• Entry to the premises – if explicitly set out in the lease the landlord has the right to enter the property during the term of the lease to carry out repair work and recover the costs from the tenant

WHAT SHOULD I DO IF I RECEIVE A SCHEDULE OF DILAPIDATIONS?

As a tenant, you have three options. You can either agree to the repairs detailed in the schedule and pay the compensation, agree to the repairs and carry them out yourselves or dispute it.

If you decide to dispute the claim, you should seek advice from a Chartered Building Surveyor that specialises in dilapidations. They will carry out a careful review of lease documentation, review the landlords schedule and provide strategic advice on the process.

During the negotiation of the claim, both landlords and tenants should try to find an acceptable compromise. If you’re unable to reach an agreement, you can use an alternative dispute resolution service or begin court proceedings.

NEED HELP WITH A DILAPIDATION CLAIM?

As one of the UK’s leading dilapidations advisory experts, Eddisons can provide specialist support to both landlords and tenants for issues surrounding dilapidations, costs, valuations and legal issues upon lease expiry. We also work with property litigation lawyers on dilapidation and expert witness cases.

Are you a tenant or a landlord needing advice in the area of dilapidations?

Find out more about our dilapidations advisory service and contact our team of experts using the form below.