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Dilapidations

Dilapidations

 

“Dilapidations” refers to breaches of lease covenants that relate to the condition of a property during the term of the tenancy or when the lease ends. (RICS.org)

 

Dilapidations issues occur when a tenant is found to be in breach of their leasehold obligations, and generally failure to comply with specific obligations such as reinstatement, repair, redecoration or failure to comply with statutory covenants.  Commercial Leases can contain specific obligations and repairing covenants requiring tenants to maintain properties and to ‘put them into repair’ at the end of their lease.

A Schedule of Dilapidations records the alleged breaches of covenant and identifies appropriate remedies which ultimately could form the basis of legal proceedings if neither party is able to reach a negotiated settlement.

  • A Schedule of Dilapidations is the document prepared by the landlord (or their surveyor) listing outstanding reinstatement, repair, legal compliance and decoration items to the property, suggesting remedial works and, in some cases, estimating the cost of the remedial works.
  • A Quantified Demand is a document setting out further details of the allegations. It is prepared by, or on behalf of, the landlord and is issued after the end of the lease. It will include details of what the landlord considers to be its likely loss as a consequence of the alleged breaches. The loss may be different to the cost of the works that will be in the Schedule of Dilapidations.
  • A Response is the reply from the tenant (or their surveyor) to the Quantified Demand and/ or the Schedule of Dilapidations. This is usually a letter/email and a Scott Schedule.
  • A Scott Schedule is an extended version of the Schedule of Dilapidations which enables the tenant (or their surveyor) to respond to the content of the Quantified Demand and/ or the Schedule of Dilapidations.

 

The Dilapidations Protocol provides a framework for the conduct of dilapidations claims on commercial property.  The protocol recommends procedures, timescales and standard forms for both landlords and tenants to follow.  The aim is to speed up the settlement of disputes providing a consistent process and by improving the quality of information passing between the parties.

 

A downloadable copy of the Dilapidations Protocol can be found on the Ministry of Justice website: Ministry of Justice www.justice.gov.uk/courts/procedure-rules/ civil/protocol/pre-action-protocol-for-claimsfor-damages-in-relation-to-the-physicalstate-of-commercial-property-attermination-of-a-tenancy-the-dilapidationsprotocol