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Dilapidations

For Landlords

Dilapidations are not just something to consider at the ends of a lease. The tenants repairing covenant is the next most important clause in the lease to the rent in ensuring your property portfolio gives you the performance you deserve. Mistakes are often made both when drafting the original lease, at lease renewal and near lease end that can have a dramatic impact on your bottom line. We can help you throughout the lease cycle to ensure your investment is protected:

At the beginning of the lease - Making sure your dilapidations clauses are drafted to best protect your investment
During the lease - is the tenant looking after the property? With ongoing volatility in a number of sectors, it is often a mistake to let disrepair build up. The end of the lease can often now be overtaken by insolvency of the tenant. The proliferation of Company Voluntary Agreements (CVA's) is unlikely to end any time soon. If you let it get to that stage without planning ahead, the value of your investment will be affected.
At lease renewal - It is very easy to forget the need to carry forward reinstatement. This situation has worsened as lease terms have shortened. Contact us to make sure you don't end up with the cost of removing tenants alterations at lease end.
At the end of the lease - Too many Landlords sign up to leases with clauses that can cause problems if not addressed early. Does your lease require notice for the tenant to reinstate the premises? Contact us early, preferably 12 months before lease end, to ensure your interests are protected. If at the end of the lease you are left with a property in disrepair, dealing with that disrepair quickly is usually the best way to keep your property performing, most importantly in getting a new tenant with minimum delay. We can help with arranging works and also suggest any upgrades to the property that may help in securing a tenant.

We will guide you through all stages of the dilapidations process to ensure you get the best from your property.

Dilapidations

For tenants

Receiving a schedule of dilapidations, either during or at the end of a lease can come as quite a shock. At the start of the lease you might have been starting your business, so the small print in the lease probably wasn't at the forefront of your mind. If you have received a schedule, or think you are about to, or are simply considering your options now your lease is coming to an end, we can help:

End of lease terminal schedules - We can negotiate the schedule with your landlords surveyor. Our experience in dilapidations helps us identify shortcomings in the landlords schedule and we will work with you to find any evidence you may have, together with evidence from the building itself, in order to build up the best case for reduction of your liability. We are happy to consider negotiating any size of schedule, providing we can see a way of helping you reduce your liability.

Interim schedules - For schedules received during the lease, we can also help in a number of ways, including negotiating the scope, arranging works on your behalf in order to limit your costs and monitoring landlords works to ensure your rights are protected.

Liability assessments - There are two occasions you should consider having a dilapidations liability assessment carried out:

At the start/during the lease

If you are having your premises fitted out, this will create a dilapidations liability and the end of the lease, because in most scenarios, your fitout will need to be removed. The liability you are creating by doing this can accounted for during the term of the lease against Corporation Tax. We can provide an assessment of your liability for your accountant.
If the premises is not in good repair and the landlord is not compensating you for this by way of a rent free period sufficient to put it into repair, you should be considering a Schedule of Condition to limit your liability. Schedules of condition need to be detailed to be effective, include photographs and description and cover all areas in order to fully protect you.

Near the end of the lease - If you are considering whether to move premises, either upsizing or downsizing, you may want to consider the financial implications of this in terms of cost planning. We can provide an assessment at any time of your likely liability and also advice of the best way of mitigating that liability. It can sometimes be beneficial to do the works before you leave. We can also assist in arranging this for you.

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