Dilapidation claims can be a complex and often misunderstood aspect of property law.

Whether you are a tenant or a landlord, understanding the basics of dilapidation claims is crucial to protect your interests. In this blog post, we will dive into the essentials of dilapidation claims, including what they are, how they are assessed, the legal obligations involved, and steps you can take to navigate the process successfully.

What are dilapidations claims?

Dilapidations generally refers to items of disrepair that are covered by repairing obligations in a lease. Dilapidation claims arise when there are breaches of those repairing covenants Dilapidation disputes are common at the end of commercial tenancies, a difference of opinion between landlord and tenant over the state and condition the premises has been left in.

Tenants generally have a few types of liabilities in leases:

• repairing covenants
• decorating covenants
• covenants to comply with statutes or other regulations
• specific condition on the exit of Tenancy
• reinstatement of alterations made by the tenant

In simple terms, dilapidations refers to the deterioration or disrepair of a property beyond what is considered reasonable wear and tear. These claims typically occur when a lease comes to an end, and the landlord wishes to ensure that the property is returned in the same condition as stated in the lease agreement.

The obligations are usually contained in the lease but sometimes can be found in other documents such as a licence for alterations.

What remedies does a landlord have for a tenant’s breach of the repairing covenant?

Obviously, each lease can be different, but generally speaking, a landlord will have a claim for damages. Rarely, a dilapidations claim happens during the term, in which case the landlord might be able to claim forfeiture (i.e. terminating the lease) as well.

Damages are limited by Section 18(1) of the Landlord and Tenant Act 1927. It provides that damages claimed by a landlord are:

1. limited to the diminution in the value of the landlord’s interest – that is, the reduction in the value of the property as a result of the works required, if any.
2. not recoverable where the property is to be pulled down or substantial structural alterations are intended or there is a significant change of use intended.

Section 18 does only apply to the breach of an obligation to repair, so for instance redecorating may not always be included/limited unless that constitutes are breach of the covenant to repair.

Diminution in Value requires a surveyor/valuer to give an opinion. It involves comparing the value of the premises in the state of repair required by the lease and the value of the premises in their actual state. In some instances, there may be no difference, in which case the landlord’s claim could be limited to zero.

Assessing dilapidations

Assessing dilapidations involves conducting a thorough inspection of the property to identify any breaches of the lease’s repairing obligations.

This process requires careful examination of both the interior and exterior elements, including structural issues, fixtures, fittings, and general maintenance. A Schedule of Dilapidations is prepared, detailing the repairs needed and estimating the associated costs. It is crucial to involve a qualified surveyor or professional to ensure an accurate assessment and avoid potential disputes.

Tenant’s Repairing Obligations

Tenants have a legal obligation to maintain and repair the property in accordance with the lease agreement.

Tenants need to understand their repairing responsibilities throughout the lease term and before its expiration. Regular property inspections, maintenance records, and prompt attention to repair issues can help mitigate potential dilapidation claims. Additionally, understanding any specific conditions or limitations within the lease agreement is essential to avoid unnecessary disputes.

Navigating the Dilapidation Claims Process

When faced with a dilapidation claim, it is important to seek legal advice to understand your rights and obligations.

There is an agreed Dilapidations Proctol which needs to be followed before any dilapidations claim can go to court. The protocol (in brief) looks like this:

1. The Landlord sends a Schedule of Dilapidations. There is a Scott schedule format which covers a variety of key points and should specify work done.
2. The Landlord sends a Quantified Demand – this sets out the monetary sums claimed and is usually substantiated with invoices if done or estimates if not done.
3. The Tenant sends the Tenant’s Response – using the Landlord’s Scott schedule, sufficient detail should be provided to understand the tenant’s position. The works should set out the costs which are agreed upon or an alternative cost.
4. Negotiations then take place. If the matter remains unresolved, then:
5. The Landlord sends a Quantification of Loss – a report providing the formal diminution in value and the claims being made. The tenant can get their own diminution in value report.
6. Stocktake and further negotiations if possible, and if not then:
7. Court proceedings may be required, but parties should consider alternative dispute resolution such as mediation.

Proper documentation, including lease agreements, property condition reports, and repair records, can play a crucial role in negotiating or defending a claim. Engaging in early discussions and negotiations with the opposing party can often lead to more favourable outcomes, potentially avoiding costly litigation. It is also advisable to consider engaging professional surveyors, solicitors, or experts experienced in dilapidation claims to guide you through the process.

Dilapidation claims can be complex and demanding, requiring a deep understanding of property law and careful attention to detail.

You can navigate the process more effectively by familiarising yourself with the basics of dilapidation claims, understanding your responsibilities, and seeking professional advice when needed. Proactive maintenance, thorough documentation, and open communication can help mitigate potential disputes and ensure a smoother resolution.

Steven Mather Solicitor is an expert in dilapidation claims. I can help you every step of the way. Typically, I get involved once surveyors have tried to resolve matters, but we can also be involved in instructing surveyors whether for the Schedule of Dilapidations or the Diminution in Value report.

I have dealt with many dilapidation claims since 2006 and every time I strive to provide:

• Plain English Advice
• Time – to understand your situation and all that you’re faced with
• Results – driven to get the best possible result for you
• Value – work on fixed fees where possible
• Convenience – meetings by phone, video call or in person at a time to suit you

Next Steps

If you’re unsure about the question of fees, or any aspect of dilapidation claims then speak to me.