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Dilapidation Claims
‘Dilapidations’ refers to a landlord’s claim for the cost of putting the property back into good repair and decoration at the end of the lease. The claim is notwithstanding the property’s condition at the start of the lease and includes loss of rent whilst undertaking those works. Dilapidation claims can be very contentious.
The tenant may feel they have looked after the property and returned it in good condition. But the landlord will often see things very differently, especially if work is required before the property can be re-let.
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Dilapidation: step-by-step
The landlord starts a dilapidations claim during or towards the end of the lease term, or once the lease has ended. In brief, the process is:
- The landlord instructs a building surveyor to produce a Schedule of Dilapidations. It sets out the relevant repair clauses in the lease, and by reference to them, the nature and rectification cost of each breach. The Schedule is sent to the tenant “within a reasonable time”, generally interpreted as within 56 days of the termination of the tenancy.
- A Quantified Demand should also be sent to the tenant within the same timescale. It should set out the landlord’s position clearly and substantiate the sums sought as damages.
- The tenant usually instructs their own surveyor, who will then correspond directly with the landlord’s surveyor.
- Many dilapidations claims settle at this point, with the parties agreeing a mutally acceptable figure.
How to respond to a dilapidations claim
In most cases where a tenant is served with a dilapidations claim, the process is as follows:
- Within a reasonable time – usually within 56 days – from service of the landlord’s claim, the tenant provides a formal response.
- The response should cover all items listed in the Schedule of Dilapidations on a point-by-point basis. The tenant should set out their position in detail and, in particular, where they disagree.
- At the earliest possible stage, the tenant should confirm if they believe the costs as set out in the Schedule are higher than the loss in value caused to the property. If that is the tenant’s case, they should instruct a building surveyor to produce the valuation necessary under Section 18 of the Landlord and Tenant Act 1927.
Dilapidations Protocol
The Dilapidations Protocol was adopted into the Court Rules in England and Wales in 2012. The Protocol encourages landlords and tenants to exchange full information at an early stage. This cards-on-the-table approach is designed to maximise the opportunities for settlement before formal court proceedings become necessary. The Protocol sets standards:
- for the content of the claim;
- for correspondence; and
- for the conduct of pre-action negotiations.
The courts treat the Protocol as the normal and reasonable approach to pre-action conduct. It is important to note that non-compliance with it can result in sanctions by the court.
Whether you are a landlord or a tenant, our team can provide you with the clear, practical advice you need to resolve a dilapidations claim.
Our recommendations for dilapidation claims
Whether you are a landlord or a tenant, we recommend:
- that you use a building surveyor with proven experience of dilapidations. If necessary, we can recommend one.
- that the dilapidations process begins before the end of the lease (typically within 3 to 6 months). A building surveyor will prepare a schedule of terminal dilapidations with the proviso that it is subject to change if further dilapidations are discovered. The schedule will notify the tenant of the breaches by clear reference to the terms of the lease and provide costings for undertaking any repair work and decoration.
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