Dilapidations Flashcards
What are dilapidations?
An allegation of a breach of contract to the tenants repairing covenants in the lease.
What is the key framework for Dilapidations?
- The lease
- Civil Procedure Rules 1999
- Dilapidations Pre Action Protocol
- RICS Guidance Note on Dilapidations
What are the Civil Procedure Rules 1999?
Includes Pre-Action protocols which are designed to encourage parties to reach a settlement before making a claim for costs.
What does the Civil Procedure Rules 1999 require you to do before making a claim?
Requires parties to exchange full information in relation to the dispute before proceedings are issued, otherwise the courts have the power to impose financial sanctions if a party is found to have acted unreasonably.
What is the Dilapidations Pre Action Protocol?
- A protocol which sets out a process the courts would expect parties to follow before they commence legal proceedings.
- Establishes a process and a timetable for exchanging information relevant to the dispute and sets the standard expected of a dilapidations schedule or quantified demand.
Under the dilapidations protocol, when should a dilapidations schedule be served?
Within a reasonable time - usually within 56 days after termination of the tenancy.
How long does the tenant have to respond to the Landlords claim?
56 days after receiving the claim.
What is an interim schedule of dilapidations?
Usually served during the lease where the landlord is concerned the tenant is not complying with the repairing obligations.
Can be served with a S146 or where the LL intends to re-enter and undertake the work themselves.
What is a terminal schedule of dilapidations?
Served prior to lease end (usually last 12-18 months) and specifies the items that require repair prior to lease end.
What is a final schedule of dilapidations?
Served after lease end where the repairs in the terminal schedule has not been complied with. May include a claim for loss of rent while repairs are being carried out.
What should a schedule contain?
- Breaches complained (categorised into repair, reinstatement, redecoration)
- Remedies
- Landlords costings
- Endorsement by LL’s surveyor
What is a quantified demand?
Where the landlord makes a claim by quantifying the loss as a result of the tenants breach.
It should be detailed and include invoices, cost of work for doing themselves or as an estimate. Can also include loss of rent.
What is the significance of the section 18 of the Landlord and Tenant Act 1927?
The landlords loss will be capped by the dim munition oil value, rather than the cost of the actual works.
e.g. property valued at £1m in good state of repair and £900,000 in current condition. Landlord’s claim for £150,000, however the ‘diminution in value’ is only £100,000 so the landlords claim would be capped by this.
Landlords loss is nil on redevelopment - dilapidations would be rendered meaningless.
What is the effect of alterations on dilapidations?
Requirement to reinstate providing the landlord reserves the right to reinstate at the end of the lease term.
How does unauthorised alterations effect dilapidations?
Landlords are entitled to claim reinstatement, providing the breach happened within 12 years from the date the landlord should reasonably of been expected to have discovered the breach.
