The Howard Jenkins Consultancy

Dilapidations

 

Dilapidations are the ongoing liability for tenants that have contractual obligations in lease agreements requiring them to maintain and repair the buildings that they occupy and discharge these obligations at lease end. 

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Dilapidations are usually crystallised at or near the end of lease terms. At this time, landlords require their buildings to be returned to them in accordance with the provisions of the leases and they instruct their surveyors to prepare schedules of dilapidations to serve on their tenants.

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This seems a straightforward contractual obligation until the detail of the covenants and the condition of each element of construction, fitting and finish are scrutinised. Not surprisingly, some landlords and their surveyors, can be overzealous when preparing schedules of dilapidations and similarly, some tenants and their surveyors can underestimate their true liability.

 

In order to deal with landlords' assessments and tenants' responses accurately, proportionately and cost effectively, appropriate advice should be taken by both contractual parties if protracted and expensive disputes are to be avoided.

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If not properly managed, even comparatively simple and low value dilapidations claims can become prolonged and expensive for both contractual parties. There is no simple solution for any one case, each property, lease and set of circumstances is unique. Employing specialist advice at the earliest possible opportunity should be the most effective way to reach economic settlement for both parties.