Harrison Clarke is a leading firm of chartered building surveyors, serving many satisfied clients in the Hampshire area.
We pride ourselves on being experts in the specialist area of dilapidations.
In this article, we explain some key facts on this topic, including useful advice and tips.
What is the purpose of dilapidations?
The purpose of dilapidations or a dilapidations claim is to ensure that a landlord does not suffer financial loss as a result of their tenant’s actions or inaction during a lease term on a commercial property.
Most commonly, a dilapidations claim will be made at lease end. There are also interim dilapidations but we are focusing, here, on lease end dilapidations claims.
A dilapidations claim will generally include an initial assessment of the landlord’s loss, normally expressed as a financial sum and set out in a schedule of dilapidations.
We have seen dilapidations referred to as ‘exit costs when coming to the end of a tenancy’.
This implies that dilapidations claims are inevitable at the end of any commercial tenancy. Although it is true that, in many instances, the landlord will have a valid claim against the tenant, this is not always the case.
The key message we want to stress is that a dilapidations claim is not set in stone as a figure that a tenant is legally obliged to pay.
It is a suggested amount, set out in the opinion of the landlord, that the tenant has every right to query and to challenge.
The payment of a dilapidation settlement is not, as some landlords believe, a ‘bonus payment’ for dealing with a change of tenancy. A landlord should not profit from dilapidations settlements.
However, as with any industry, not all claims are valid as some landlords and dilapidations surveyors will see dilapidations as an opportunity to extract some additional money from their tenants.
It is important that a landlord’s loss is compensated whenever a claim is justified, but identifying any justifiable losses can be confusing and complicated. The body of case law surrounding this topic can be tricky to navigate too.
We are seeing an increasing number of claims where the landlord or their professional team are unable to provide substantiation of their loss, even if the lease breaches are obvious.
Note: It is very important to remember that a breach of the lease does not automatically cause the landlord to incur a loss that they need to be financially compensated for.
Firstly, don’t take the dilapidations claim at face value, and automatically start addressing all the works set out in the schedule. Doing so could be costly, so it is prudent to double check that the work needs to be done, and that it is your responsibility as the tenant to carry out this work, before you incur any expense.
It may be that the works are your responsibility, for example if it is a modern building that will be re-let for its existing purpose, but there will also be instances where completing works will not be in the landlord’s or the tenant’s interest, even if the disrepair is detailed in the schedule of dilapidation.
One example of this is where a landlord could be asking for a property to be redecorated, even though they plan to change the layout of the building or redevelop the site.
So, before you start doing any works, we recommend that you contact a specialist dilapidations surveyor who will be able to work with you to draw up a cost-effective strategy for dealing with the dilapidations issue. A good specialist surveyor will help you to understand the risks involved with different approaches.
Just like choosing any professional, it is important to find a known and proven specialist in their field who can demonstrate to you their experience and expertise.
Most building surveyors offer dilapidations services, sometimes because they feel it is a standard service that potential clients will expect them to offer.
However, dilapidations claims are actually a niche, specialist area that not too many surveyors are very experienced in. Hiring an excellent dilapidations surveyor could potentially save you thousands of pounds, by them knowing how to successfully and substantially reduce your claim.
Word of mouth recommendations can often be really helpful.
If you don’t have that option, it is worth investing some time doing a little research, when there is potentially a lot of money at stake.
At face value, it probably looks cost-effective to choose a surveyor local to the property involved, so that the surveyor doesn’t have to charge you for their travel time and travel costs; however you must still make sure that your surveyor is an expert – and not just ‘dabbling’ in dilapidations. Often, incurring the expense of an out-of-area specialist will mean that your claim is significantly reduced and will provide a better return on investment.
When you have compiled a shortlist of surveyors, you could see what their online reviews say, on sites like Google and Trustpilot, and you could see if they have an online presence to get a better feel for them, like a YouTube channel where they’re presenting useful advice.
We would also advise that, when you talk to a building surveyor about a dilapidations claim, you ask them about their track record in defending dilapidations claims.
Every claim is different but, at Harrison Clarke, we are delighted to have recently reduced several of our clients’ original dilapidations claims by 90% or more – sometimes even 100%!
Our expert team of dilapidation surveyors would be happy to give you robust advice in this area and explain how they can assist you and your company in properly negotiating your dilapidations claim.
Call our team of highly qualified and experienced surveyors on 023 8155 0051, or email us at info@harrisonclarke.co. We would welcome the opportunity to help you!
At the time of writing, we have a total of 68 reviews across Trustpilot and Google. We are proud to say that they are all 5 star ratings across the board.
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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.
