As a leaseholder of commercial offices, or property, you may be at a stage where a dilapidations notice is served on you, to reinstate and repair the property at the end of a lease term, or before moving out. Dilapidations is the term which Surveyors and Landlords use, being a process to identify the items which need action, using a schedule of condition and lease agreement with terms and clauses, as the yardstick to identify what changes have occurred since occupation.
Not all leases will have a Schedule of Condition prepared or attached when the lease is drawn-up, and that can be a challenge when trying to establish whether the leaseholder/tenant has caused damage or made changes to the property for their business. In some cases, this might be a combination of offices and residential flat above under the same lease.
If you are agreeing a new lease, then it is in the interest of both parties to the contract to have a detailed Schedule of Condition attached to the lease, which may help avoid problems, later on. Surveyors usually act for one side or the other ie Landlord or Tenant. In doing so, they should be aware of the case-law and RICS guidance on dilapidations, and the need to have a structured and professional approach in pursuing any negotiations in respect of the dilapidations claim.
A ‘Scott-Schedule’ is a sort of spreadsheet and table, which identifies the location, rooms, areas, and relevant items to the property and demised areas. This is prepared by a qualified surveyor, and with his or her observations on condition, detailed measurements, and estimated costings of repairs and reinstatement. There will be references to the lease terms in the schedule, so one can establish the basis for the claim.
This schedule is usually served on the Commercial tenant, with a covering letter/notice to pay the calculated sum or sums to the landlord or head leaseholder. It is then for the Tenant with his/her surveyor to negotiate the amount, and make their case. In some situations, the Tenant will be asked to reinstate the premises back to the original layout before they signed the lease.
Arun Associates, Dilapidations Surveyors London & Home Counties, have acted for many dilapidations’ clients, both on the Landlord side, and also the tenanted side, so are used to the approach and how negotiations progress to a practical and prompt outcome.
Our experienced surveyors can review lease obligations and prepare a Scott-schedule type document setting out the anticipated dilapidations liability, and provide a recommended strategy going forward (ie. use a comparison and basis for financial settlement against the action landlord’s claim and tender and complete the identified works. Note we can undertake dilapidation assessments for tenants 12 to 18 months before the lease expiry.
Experience, skill and trust are all part of the negotiation proceedings. Whether there is a dispute on the decorations that should be carried out after a lease expires, or the reinstatement of building services, or removal of partitions, Arun Associates surveyors will be able to arrive at a negotiated solution to satisfy the parties without fuss, or prolonging the negotiations unnecessarily.
Whether you are a commercial Tenant needing advice, or a Landlord feeling exposed at the end of your Tenant’s lease, Arun Associates would be pleased to assist and advise you. We operate broadly as Dilapidations Surveyors London & Home Counties, but would also be pleased to discuss other geographical areas in the UK.
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