Dilapidations

Question 1

What note informs your dilapidations

Answer 1

RICS PROFESSIONAL STANDARD Dilapidations England and Wales (2016)

Question 2

What is the purpose of Dilapidations?

Answer 2

Entitles the Landlord to get the property back in the same condition as it was handed over to the tenant in

Question 3

What is the process of dilapidations?

Answer 3

• Review the repairing obligations in the lease to see if it is a FRI
• The lease will confirm if there is a schedule of condition (If the property is leased to a tenant in poor condition, the tenant will want a record of the condition so they are not made to put in back in Better condition than when they signed the lease) - normally a written and photographic record.
• If a Schedule of DILAPIDATIONS is served it can be negotiated by the tenant, once agreed, the tenant can either do the works themselves OR pay an agreed amount for the Landlord to do the work.
• Landlord is permitted to carry out the works themselves and recharge the tenant if agreed - there is a clause in the lease which allows this: Jervis vs Harris.

Question 4

What are the 3 forms of schedule of Dilapidations?

Answer 4

• Interim Schedule: served during the lease (min 7 years) but normally where there is AT LEAST 3 YEARS remaining on the lease - either by the landlord or tenant - refer to the Leasehold property repairs act)
• Terminal Schedule: Served within the last 3 years of the lease
• Final Schedule: Served at lease expiry or after the tenant has vacated the property

Question 5

What is the claim of dilapidations based on?

Answer 5

The costs of the works OR the diminution in value (in accordance with S18 L&T Act 1927)

Question 6

In what circumstances can you not serve a schedule of dilapidations?

Answer 6

If the building is going to be redeveloped

Question 7

How do dilapidations relate to alterations?

Answer 7

LTA is an ‘extension’ of the original lease and so will be considered at lease end → if required to reinstate to original condition, it will be included within dilaps works/settlement.

Question 8

What is Section 18 L&T Act 1927

Answer 8

• It limits a landlord’s claim for damages at the end of a commercial lease.
• The landlord can only claim the lesser of either the cost of repairs or the reduction in the property’s value due to disrepair.
• Additionally, if the landlord plans to demolish or redevelop the property, the tenant is not liable for repair costs.