Did you know there are three different types of Schedule of Dilapidations?
There are Interim Schedules of Dilapidations, Terminal Schedules of Dilapidations and Final Schedules of Dilapidations.
In this article, our expert chartered surveyors at Harrison Clarke look into the timings of when each type can be served and what the purpose is of each type of Schedule of Dilapidations.
If a landlord believes that their tenant is not looking after their leasehold building as they should be by the terms of their lease, they may decide to serve an Interim Schedule of Dilapidations to encourage them to repair the building.
An Interim Schedule can be served at any time during the lease term, although it would not normally be served in the final two to three years before the lease expires as another type of Schedule is likely to be more appropriate at that point in the lease.
Normally, the objective of an Interim Schedule of Dilapidations is for a specific action, for example requiring a tenant to complete the necessary work. In this context, it would be inappropriate to include costs as financial remedy is not the aim.
Unlike the other types of Schedules of Dilapidations, an Interim Schedule technically only needs to set out the lease breaches, although many will, in addition, offer suggestions on correct repair methodology.
In most cases, breaches of the lease are only included if they are going to lead to accelerated degradation to the fabric of the building or the building’s services.
So, unlike a Final or Terminal Schedule of Dilapidations, it is unlikely that items such as internal decorations would be included.
Interim Schedules are usually served as Repairs Notices. Individual leases may have different requirements for service in this context, particularly if the landlord wants the tenant to bear the cost of preparation of service of the Interim Schedule. As such, this type of Schedule of Dilapidations should be served by a knowledgeable solicitor.
If a tenant does not complete the repair works required by an Interim Schedule of Dilapidations, the landlord has a number of options, including the landlord completing repair work at the tenant’s cost if there is provision in the lease.
This provision is often known as the Jervis v Harris clause, following the high profile 1996 court case which is widely recognised in the field of dilapidations. As a consequence of the court’s ruling in this case, most modern day leases contain a clause allowing a landlord to enter the let property and carry out repair works at the tenant’s cost if the tenant fails to do so themselves.
Other options – or remedies – are less common, but can include financial damages, forfeiture in the lease, a specific performance order, an injunction or a combination of all of these actions.
A Terminal Schedule of Dilapidations can be served near the end of the lease, typically within the last 18 months to three years.
Many landlords will wait until the last few months or even the final few weeks of a lease to serve a Terminal Schedule of Dilapidations. This can sometimes be costly for the landlord as the opportunity to require a tenant to reinstate any alterations can be lost if notice is served too late.
A Terminal Schedule of Dilapidations will consider the dilapidations liability accrued at the point of preparation of the Schedule, and it serves to guide the tenant as to the work required to remedy non-compliances with the lease.
This Schedule gives tenants an opportunity to complete the necessary works themselves to avoid a financial settlement. Alternatively, a tenant may instead decide to budget for a financial settlement. This can often be a favourable option as a lot of commercial entities are focused on their core business and they have neither the time nor the inclination to become involved in the disruption that building works bring.
A Final Schedule of Dilapidations is served once the lease has ended.
In many cases, this is the only Schedule of Dilapidations served upon a tenant. However, it is possible that the tenant has first been served by a Terminal Schedule. If additional damage is found after lease end, at this point the Terminal Schedule may be adapted and rebadged as a Final Schedule.
Under the dilapidations protocol, a Final Schedule of Dilapidations should normally be served in a reasonable time after lease end, normally within 56 days.
At this stage, a tenant will have no legal rights to re-occupy their premises unless a separate agreement with the landlord is reached.
In this instance, therefore, the only remedy to address breaches of the lease is payment of financial damages by the tenant to the landlord.
Dilapidations is a specialist area of law and you will want to make sure you have the best representation available, whether as a landlord or tenant. For this reason, you should ensure that your surveyor is a true dilapidations specialist, like our team of specialist dilapidations surveyors at Harrison Clarke.
If you need advice on your dilapidations obligations or want to discuss disrepair in a tenanted building, our team of surveyors is on hand to provide the advice you need.
Everyone’s circumstances are unique. We have a team of expert and highly experienced dilapidations surveyors who can confidently and knowledgeably negotiate your dilapidations claim, hopefully saving you a substantial amount of money.
If you would like to talk through your dilapidations situation, please get in touch.
We have a range of videos talking through various surveying services, including all aspects of dilapidations. 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 delighted to help you.
Call our friendly, expert and highly qualified surveyors on 023 8155 0051, or email us at info@harrisonclarke.co. We would welcome the opportunity to help with any queries or needs you may have.
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Tim set up Harrison Clarke Chartered Surveyors in July 2017 following a series of public and private sector surveying roles, having previously worked for the University of Cambridge, Rund Partnership, Goadsby, and CBRE.
Tim has degrees in building surveying, construction project management, and business administration.
