It pays to have an expert on your side

Dilapidations can be a contentious and complex issue for commercial property tenants and landlords. Claims are costly and often unexpected, outcomes can be severe, and in some cases, they can be equal to or greater than a Company’s profit over the duration of the lease.

If you are a landlord, a poorly executed dilapidations claim could leave a large financial gap between the settlement achieved and the cost of returning the property to a tenantable condition. This scenario could also result in the sustained depreciation of the property’s condition and consequently, its value.

As a commercial tenant, misunderstanding your dilapidations obligations can bring:

• The commercial risks of breaching lease terms
• Inability to execute a lease break if you fall foul of often onerous conditions
• Financial uncertainty of not accruing money to pay for a dilapidation claim
• Breach of UK accounting standards
• Failure to take advantage of dilapidations tax free elements
• 'Unexpected bill' at the end of a lease (usually a critical time for a business)
• Higher repair and reinstatement costs than otherwise necessary

Key Questions for tenants:

• Do you fully understand what dilapidations are?
• Are you expecting a bill for dilapidations at end of your current lease?
• Are you accounting for dilapidations as per UK accountancy standards?
• Do you fully understand the obligations and liabilities under the terms of your lease in regard to repair, reinstatement and decorations?
• Do you have a lease break, or are you looking to execute a break?
• Are you in the last two years of your lease?
• Are you looking to repair, alter or improve your property?

Key Questions for Landlords:

• Do you know that under a lease a tenant is usually required to undertake repair, reinstatement, statutory compliance and decoration works, and are you aware they are responsible for fulfilling some of these obligations throughout the term of the lease, not just at lease expiry?
• Are you ensuring that the tenant is maintaining the demised premise correctly and in accordance with your lease obligations?
• Is your property in need of urgent repair, and is the current condition affecting its capital value?
• Are your fees for a surveyor acting on your behalf the responsibility of the Tenant?

Whether your answer is 'YES', 'NO' or that you simply ‘DO NOT KNOW', contacting Robertson Simpson today for free expert advice could save you time and money. We will help you understand the terms and conditions of your lease and provide essential guidance. Pro-actively working towards a dilapidation's timeline, ideally, 18 months from a possible lease termination, will ensure you do not face any sudden financial surprises.

Get it right from the beginning - Schedules of Condition

Unfortunately, we see far too many schedules that are ill-prepared by so-called experienced surveyors. That's why our experienced team of RICS Chartered Surveyors can also prepare Schedules of Condition on behalf of the landlord or tenants at the commencement of a lease.

This type of schedule provides a factual record of the condition of the property at commencement and can prove a very useful tool for tenants seeking to exclude certain elements from their repairing obligations at the start of the lease, reduce future dilapidation liabilities, or merely simplify the process of identifying a tenant’s alterations at lease expiry.

Our team will work with you to ensure that the schedule is correctly compiled so that it can be relied on at lease end.