DILAPIDATIONS: LANDLORD AND TENANT

Most surveying firms offer dilapidations as a service. On paper, the process is simple, however there are many factors that can impact the recoverability of a dilapidations claim. The commercial reality is often dependant on the landlord’s true intentions with the premises once the tenant has vacated. PMP think commercially and therefore can guide both the landlord and the tenant on the potential pitfalls to maximise the landlord’s recoverability or to protect the tenant against unnecessary expenditure.

We tailor the strategy depending on the client’s requirements and we outline this before negotiating with the opposing party. We consider the impact of the lease and the law, both common and statutory.

Dilapidations Services include:

• Terminal
• Interim
• Liability Assessments

We have inhouse dilapidations experts in each of our regional offices.

Terminal Dilapidations

Terminal Dilapidations is a claim for damages made by the landlord against the tenant for non-performance of the tenant’s covenant’s relating to a commercial letting. A dilapidations claim will typically include failure to repair, reinstate, redecorate, compliance with statute, and any additional consequential losses.

Before the tenant’s lease expires, typically the landlord appoints a surveyor to inspect the premises and identify any breaches of covenant and to serve the tenant with a schedule, outlining the breaches and the associated remedies. This is known as a Terminal Schedule of Dilapidations. If the lease has ended and the breaches remain, the schedule is costed and the landlord pursues for a monetary settlement.

PMP has a good track record of settlements for both landlord and tenant and we track and assess our settlement statistics to measure our success.

Interim Dilapidations

If the lease permits, a landlord can enforce the tenant to perform repairs during the term to maintain the asset and ensure compliance with legislation protecting the building and occupants. It is often the case that a landlord holds the right to enter the premises to perform the works where the tenant has failed to execute the remedial works in the permitted time period. PMP’s dilapidations experts can advise on the landlord and tenant’s rights under the lease, provide a scope of works based on the tenant’s liabilities and assist in procuring the works for both landlord and tenant.

Dilapidations Liability Assessment

There are many benefits to accounting for your dilapidation’s liability as a tenant, not least of which is to ensure that suitable funds are available to perform the works or agree a monetary settlement with the landlord at the end of your lease. Other benefits include potential savings on their corporation tax bill under FRS 102 or to offset known future repairs (dilapidations) on properties, classing it as an expense and including a profit and loss when accounting.

PMP not only provide an assessment of the landlord’s claim but also assess the likely settlement figure, which is often lower than the claim following negotiations, providing the tenant with a more realistic outcome greater peace of mind.