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DILAPIDATIONS

A breach of the non-financial obligations in a lease that could give rise to a Dilapidations claim, for example, the remedy of disrepair and reinstatement of the physical state of a property, or for financial damages relating to dilapidations made during the lease period.

An end of term Dilapidations claim from the Landlord often comes as a bombshell to the recipient Tenant. A Tenant’s reticence to carry out necessary work can land them with, not only the cost of the works, but also continued rent liability. If left to the uninitiated, aggravation over Dilapidations claims could prove financially very costly, and also extremely time consuming.

The Lorenz Consultancy has specialised for many years in Dilapidations claims, for both Landlords and Tenants, and advise our Clients on Dilapidations issues at the beginning of lease negotiations, in order to minimise liabilities at the end of the lease term.

We specialise in substantiating claims and minimising payments for Landlords, or the cost of works for Tenants. On the rare occasion, where financial settlement by negotiation fails, we can supervise works and in the event of a dispute, the Courts are there to protect both sides. However, our expertise usually allows us to achieve negotiated settlements, to mutual satisfaction of both parties, without the need for litigation.

Dilapidations negotiations are a niche service within the field of Surveying. One of the most important skills is the commercial ability of the Surveyor to weigh up the potential result of litigation versus negotiation, in order to confidently advise the Client as to which avenue to pursue. We advise the Tenant of those items which are truly attributable to the Dilapidations claim, and the Landlord how to secure the maximum payment in the minimum timeframe.

The appointment of a Dilapidations Surveyor is as important as appointing an accountant to prepare your financial accounts, or a Lawyer to handle your legal affairs.

The services on offer can best be summarised as follows:

FOR TENANTS

  • Preparation of Schedules of Condition
  • Interim defence of Schedules of Dilapidations
  • Terminal defence of Schedules of Dilapidations
  • Strategic assessment and advice for financial accounting
  • Repairs notice advice
  • Expert witness services to Court
  • Minimisation of the Landlord’s Claim
  • Management of contractors

When served with their first Schedule of Dilapidations, most corporate occupiers feel overwhelmed. The schedule is a lengthy, highly detailed, legal document detailing their Dilapidations liabilities. If you have received a Dilapidations schedule, you should contact an expert Dilapidations Specialist like The Lorenz Consultancy, who can represent your best interests to ensure that the Landlord does not take the advantage.

For example, whilst there may be a legal requirement for the corporate occupier to reinstate their premises to its original specification, the Landlord’s claim may be capped. If the Landlord intends to redevelop, the corporate occupier’s liability might be nil. Accountants and business advisors now advise corporate occupiers to accrue for any anticipated Dilapidations costs in an appropriate time period. Accounting for Dilapidations reduces tax liability, but only if accurately and professionally assessed. Dilapidations liabilities do not go away. They need to be assessed on an on-going basis for corporate occupiers by Specialist Dilapidations Surveyors with a detailed knowledge of the local area.

FOR LANDLORDS

  • Preparation of Schedules of Condition
  • Preparation of Interim Schedules of Dilapidations
  • Preparation of Terminal Schedules of Dilapidations
  • Final claim negotiation
  • Strategic advice to Landlords approaching the Tenant’s lease expiry
  • Negotiation of Landlord’s schedules
  • Review of “stalled” Dilapidations negotiations
  • Expert witness work
  • Supervision of works

HELP

Landlords should also seek advice and protection from a Dilapidations Specialist such as The Lorenz Consultancy. A properly assessed and presented Dilapidations schedule can prevent disputes with Tenants that can result in a protracted negotiation before money is collected. Using a Dilapidations Specialist is even more vital when assessing limitation of a Landlord’s Claim, when seeking damages against the corporate occupier for non-compliance with Lease covenants.