Schedule of Dilapidations
A report on the condition of a property during or at lease end,
determining whether the landlord or tenant is responsible for repairs
At the end of a lease term, premises must be restored to a sound condition, ready for a new tenant. All leases include covenants that dictate whether the landlord or existing tenant is responsible for the remedial works.
A Schedule of Dilapidations details the redecoration, repairs and reinstatement works required to comply with the terms of the lease. When compared to a Schedule of Condition, which records the state of a property at the beginning of a tenancy, the dilapidation report identifies any breaches to the lease covenant. It enables liability to be properly attributed, avoiding disputes.
OA Building Surveyors act for either landlords or tenants, since both parties need protection. We regularly carry out dilapidation surveys on commercial units, industrial premises and apartment blocks. We assess every aspect of the property, from the condition of the walls to the structure of the roof. The issue of dilapidations is rarely straightforward. Using the services of a RICS Chartered Surveyor before signing a lease or during a claim can prove invaluable.
Why do landlords need dilapidations advice?
Unless premises are returned in good condition, as a landlord, you’ll often be unable to re-let the property. If concerned about neglect during the lease term, you may serve an interim Schedule of Dilapidations, as a warning to your tenants. If the covenant is breached when the lease expires, you can use the final dilapidations report to make a financial claim. The amount by which the property has been devalued due to the breaches will determine your loss.
Why do tenants need dilapidations advice?
As a tenant, you need to ensure that an unfair claim is not imposed on you that requires more work than the lease dictates. Requesting an inspection and Schedule of Condition before a lease is agreed may offer you some protection. You should investigate the validity of any claim at lease end in terms of the scope of the works, the specification and pricing, and the alleged loss in asset value. Advice from a Chartered Surveyor will limit your repairing liability. You may find it more cost-effective to carry out the relevant repair works yourself.
Whether to use a solicitor or Chartered Surveyor
Our surveyors are experienced in the preparation of dilapidation schedules and in negotiating claims. Interpreting leases is an essential part of the process. Whilst solicitors can advise on certain elements, Chartered Surveyors are specialists in understanding and advising on repairing clauses and are expert consultants in preparing dilapidations documentation. We have access to the relevant sources for costing such issues and, acting as negotiators to RICS professional standards, we can successfully settle a claim.
The Dilapidations Protocol
Our surveyors follow the Dilapidation Protocol when negotiating a claim, which ensures fair and timely processing. The pre-action protocol aims to prevent landlords exaggerating a claim and can lead to early settlement without court involvement. If the matter does end up in court, whether or not parties have followed the protocol will determine how their claim is considered.
Section 18 valuations
Whilst repairs often dictate the extent of a claim, other factors are taken into consideration, such as potential loss to the landlord caused by breaches of the lease. A Section 18 valuation acts as a statutory cap on damage claims in that the landlord cannot claim for works that would be superseded by their intentions for the property, for example, demolition that would make certain repairs redundant. Preparing Section 18 valuations can significantly reduce a tenant’s dilapidations liability.
