Dilapidations and Commercial Lease – What is it?

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Property dilapidations refer to the process of identifying and repairing any damages or defects that exist in a property, particularly commercial properties, at the end of a lease.

 

It is typically the responsibility of the tenant to ensure that the property

is returned to the landlord in a repaired condition, in accordance with

the lease covenants, taking into account reasonable wear and tear.

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Before the end of the lease, the landlord or their appointed surveyor

will carry out an inspection of the property to identify any areas of

damage or disrepair.

This inspection will form the basis of a Schedule of Dilapidations, which

outlines the repairs that the tenant is required to carry out.

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The tenant may be given the opportunity to carry out the repairs

themselves, or the landlord may arrange for the work to be carried

out and deduct the cost from the tenant's deposit.  The tenant may

dispute the dilapidations schedule and appoint their own Chartered

Surveyor to assess the contents of the Schedule.

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                                           It is important for both landlords and tenants

                                           to understand their obligations with regards to

                                           property dilapidations, as failure to comply

                                           can result in financial penalties or legal action.

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                                            The landlord typically includes a clause in the lease agreement that

                                            outlines the tenant's obligations with regards to dilapidations. This may                                                include requirements to ‘put’, ‘keep’, repair or replace any damaged                                                        fixtures or fittings, to redecorate the property, and to return it to its                                                        original state. It is also usual for a clause in the lease stating that the                                                      tenant is responsible for the costs of the preparation and service of a                                                    Schedule of Dilapidations.

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                                            If the tenant fails to meet these obligations, the landlord may be able to                                                withhold part or all of the tenant's deposit to cover the cost of repairs                                                    and renovations. The landlord may also be able to take legal action                                                        against the tenant to recover any additional costs.

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                                            It's worth noting that property dilapidations can be a complex area of                                                    law, and it's important for both landlords and tenants to seek                                                                  professional advice to ensure that they understand their rights and                                                        obligations.

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                                            We have 30 years experience in dealing with Schedules of Dilapidations,                                                so give us a call if you have any questions.