Dilapidations Flashcards
What are Dilapidations?
The claim made by the landlord against their tenant due to the condition of the property during or at the end of he lease period, for he cost incurred in addressing he tenants breaches of lease.
What is a break clause?
A clause permitting either the landlord or tenant to terminate a fixed-term lease early by serving notice on certain pre-agreed dates as stated within the lease.
What are the different types of dilapidations survey?
Interim Schedule - served by the landlord or the tenant during he ;lease, with at lease 3 yeas remaining.
Terminal Schedule - served at or after the lease expiry/break clause date when the tenant is out of the occupation and the landlord wants to claim damages
Dilapidations Assessments - Provides accurate budget for reinstatement at any point during the lease. Typically provided to tenants
What is Limb 1 of the Landlord and Tenant Act 1985?
Limb 1: refers to diminution of the landlord reversion - damages for the breach of the repairing covenant shall not exceed the amount by which the value of he premises is diminished owning to the breach.
What is Limb 2 of the Landlord and Tenant Act 1985?
Supersession: No damages shall be recoverable if the premises are to be significantly altered to such an extent that they render the repairs valueless.
How is diminution calculated and settlement reached?
The difference between the valuation of the property in a compliant state and the valuation of a property in its actual condition at lease expiry. the diminution figure is then compared to the common law claim and the lower of the two figures forms he correct measure of damages.
How can you go about limiting a dilapidations claim?
Firstly, review the lease covenants at assess the tenant’s liability.
Assess the costs for exaggerated items.
Also determine any possibility for using Section 18 arguments (LL&T Act 1985 Limbs 1&2).
What is the Dilapidations Protocol?
It describes the conduct the court expects the parties to follow before commencing legal proceedings in relation to a dilapidations claim.
It sets out a process and timetable for the exchange of information and establishes standards for the content and the quality of schedules of dilapidations and quantified demands.
What are the aims of the dilapidations protocol?
Encourage the exchanges of early and full information about the dispute.
Enable the parties to avoid litigation by agreeing a settlement before proceedings are commenced.
Support the efficient management of proceedings where litigation cannot be avoided.
What are the time limits set by he dilapidations protocol?
A dilapidations claim should be served within a ‘reasonable time/’, which it suggests will generally be not more than 56 days after the end of the lease.
The tenant must respond to the claim again within a reasonable time, usually not more than 56 days.
Provide examples of consequential loss?
Legal fees in connection with the service of the schedule
Administration of the works
VAT
Loss of rent
Loss of service charge
Preparation of schedule / surveyors fee
What is quantified demand?
Sets out the details of the Landlord’s loss as a result of the dilapidations. Typcially includes:
- Sets out monetary sum sought as damages
- Sets out whether VAT applies
- Sets out date (being a reasonable time) by which the tenant should respond. Usually 56 days.
What are the key clauses that you might look for within a lease?
Reinstatement
Repair
Decoration
Statutory Obligations
Yielding Up
What is contained within a dilapidations schedule?
Schedules of Dilapidations record alleged breaches of covenant and therefore generally contain details of the contractual obligations alleged to have been breached.
What should the surveyor make clear in their fee proposal?
If engaging specialist as sub-consultants
Which specialists are likely to be required
If the surveyor is allowing for any reinspection such as at lease end
Is the surveyor allowing time to meet with the tenant surveyor
What is the proposed fee arrangement
