Harrison Clarke is a leading firm of chartered surveyors in the Hampshire area. With years of day to day experience in dealing with dilapidations, and an excellent track record of successfully handling dilapidations claim negotiations for our clients, we are ideally placed to answer these common questions raised by commercial landlords.
My tenant’s commercial lease term is ending. What should I do about dilapidations?
Ideally about a year before your tenant’s lease ends, you should ask a specialist dilapidations surveyor for advice. Whilst this may sound early, taking advice at this point ensures that you will be in a position to fulfil your obligations and protect yourself or your property company from loss.
Specifically, taking advice early can safeguard you from losing the right to require reinstatement of your tenant’s alterations, if your lease stipulates that you must provide notice of this before the lease ends.
Sometimes, a lease might require you to give six months’ notice or more for removal of alterations. Because of the potential to lose the right to require the property to be reinstated to a former state, if there is any uncertainty as to whether your tenant will renew, we recommend that you serve a Schedule of Dilapidations to clearly state your position.
In some cases, this may not be necessary, but your dilapidations surveyor will be able to advise you based on your particular circumstances.
What if the lease ends next month? Is it too late?
Under the Limitation Act 1980, a lease is classed as a speciality, which means that claims can be brought up to 12 years after the lease has ended. As such, serving a Schedule of Dilapidations relatively late shouldn’t be an issue, although this will depend on the exact wording of the lease.
To reiterate, if a lease requires the landlord to provide written notice that they require alterations to be removed, this must be done either within the timescale stipulated by the lease, or at least within a reasonable time before lease end as the notice must give the tenant a realistic opportunity to reinstate any alterations.
If you have left it late, your dilapidations surveyor will advise you on your likely dilapidations recovery, and they will hopefully be able to act quickly in order to maximise your dilapidations recovery.
What happens after the Schedule of Dilapidations has been prepared?
Traditionally, Schedules of Dilapidations have been formally served on tenants by landlords’ solicitors.
The dilapidations protocol sets out how the courts expect a dilapidations claim to be handled. The protocol does not require a Schedule of Dilapidations to be formally served and refers only to the sending of the schedule. However, many clients still like their solicitors to formally serve the schedule, particularly if this will be at their tenant’s expense – which is common.
Using a solicitor can be helpful, especially if there is a particular reason that service is necessary, such as providing a formal notice to reinstate.
It is, however, often unnecessary and, apart from the extra cost incurred, a main downside of service by solicitors is that it can slow the process down.
We have been involved in a court case where the schedule was prepared in time to require the property to be reinstated but, due to delayed service by solicitors, the landlord lost their right to reinstatement. This was frustrating for all parties as the dispute hinged on the requirement to reinstate.
There is often no reason why the surveyor cannot serve or send the documents and this is often a quicker and more efficient option, getting a better outcome for the landlord.
I have sent a claim to the tenant – will they just pay up?
Assuming a claim has been sent to a tenant before lease end, it is their choice whether they want to complete the necessary work to address any breaches of the lease, or whether they would prefer to pay financial compensation, also known as damages.
In a typical situation, a tenant will accept some liability for dilapidations but refute some other dilapidations items. This can often lead to a period of negotiation.
You should think of a Schedule of Dilapidations as a technical record of lease breaches.
As dilapidation surveyors, we use this document to reach an agreed assessment of loss, which is likely to be lower than the initial schedule’s total. There are numerous reasons for this amount ending up lower than the original claim, but the key point is that any dilapidations payment should only be made from the tenant to the landlord to address financial loss, and a dilapidations payment should not be seen by a landlord as a bonus payment for dealing with a void or a change of tenant.
We always recommend using a specialist dilapidations surveyor to ensure that your dilapidations loss is minimised and your recovery of damages maximised.
If one of your commercial tenancies is coming to an end, or if your tenancy is at midterm and you want to plan for the future, it is time to get in touch with an expert dilapidations surveyor.
How Harrison Clarke can help
Dilapidations is a specialist area of law and you will want to ensure that you have the best representation available.
For this reason, you need a true dilapidation specialist like one of our team of specialist dilapidation surveyors at Harrison Clarke.
If you would like to talk through your dilapidations circumstances, please get in touch.
We have a range of videos talking through various surveying services, including Schedules of Dilapidations and negotiating dilapidations claims. You can access them via our website or our YouTube channel. If your query is not covered in our videos and blogs, please don’t hesitate to get in touch.
We would be more than happy to help you.
How you can contact Harrison Clarke
Call our friendly, expert and highly qualified surveyors on 023 8155 0051, or email us at firstname.lastname@example.org. We would welcome the opportunity to help with any queries or needs you may have.
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