What are dilapidations?

As a tenant, choosing a commercial property to rent can be a complex decision, so it is important to understand the process. The same is true for landlords— your properties are your livelihood, and it is vital to protect your investment while also giving your tenants the best possible experience. At VKB Building Consultancy, we believe you should be as informed as possible when leasing or letting commercial property, and so this week we are discussing a potential source of dispute within the landlord/tenant relationship— dilapidations.

So, what exactly are dilapidations? They are the repair, reinstatement and redecoration work and associated costs to the tenant, incurred at the conclusion of a lease, which represent the requirement to either bring the property back to the condition it was in before the lease began or as specifically required within the terms of the lease. This can range from cosmetic issues like painting and decorating, up to more serious and costly repairs like plumbing or roof repairs. It can also include removing any alterations or fixtures and fittings that the tenant has made during the lease term.

If the tenant has not met the required obligations under the terms of the lease, the landlord can claim these costs at the end of a tenancy by serving a legal document called a terminal schedule of dilapidations. As well as including costs for redecoration, repair, and reinstatement, this can also include the loss of rent incurred whilst repairing the property if the damage is severe enough.

Whether you are a landlord or tenant it is important to develop an appropriate & cost-effective dilapidations strategy.

At VKB Building Consultancy we advise our clients in respect of all dilapidations matters, including undertaking the following services:

• Dilapidation’s strategy advice for landlords & tenants.

• Preparation of interim & terminal Dilapidations Schedules for landlords, including negotiation of final settlements.

• Assessment of dilapidations liabilities for tenants, including negotiation of final settlements.

• General advice & guidance to landlords & tenants in respect of Section 18(1) of the Landlord and Tenant Act 1927.

• Defence for tenants in respect of interim & terminal Dilapidations Schedules; &

• Negotiating & monitoring the scope of works for both tenants & landlords.

The Royal Institution of Chartered Surveyors mandates the highest ‘gold standard’ of professionalism and qualifications within building consultancy; you should always choose a RICS regulated firm like VKB Building Consultancy to advise you in relation to commercial property whether you are a tenant or landlord.

We provide you with clear, impartial, and expert advice, to ensure that as a landlord your asset is protected and as a tenant you do not receive an unfortunate financial surprise at the end of a tenancy.

To discuss your commercial property interest and how we can help form and manage a dilapidations strategy, you can contact us at office@vkbbuildingconsultancy.co.uk