Dilapidations - a sign of the times!

Over the last 18 months we have seen Interim Dilapidation matters becoming a more common place

. Savvy landlords are protecting their investment by ensuring the tenant complies with their repairing and decorating covenants, whilst ensuring the property is well maintained. Many landlords are also concerned over the financial standing of their tenants and want comfort that if the tenant did cease trading, that the building itself will be in a condition suitable to aid re-letting.

Of course there are landlords who think they can use the lease obligations to exploit the tenant and get them to do any works they see fit. 3SIXTY Real Estate, www.3SIXTYrealestate.co.ukwith officesbased in Bristol, London and Exeter,have recently been involved in an interesting case at a London Hotel, where a substantial Interim Dilapidations Schedule was served by the landlord following a request by the tenant to assign the lease. Following their inspection of the property, it became evident that the schedule was grossly exaggerated. The landlord, however, refused to adjust the schedule, whilst also withholding consent to assign. Following protracted negotiations (for which the assignment was in abeyance), the two parties finally agreed to appoint a third party Expert by the RICS in order to pass a full and final binding judgement and resolve the dispute. Following the preparation of their Expert Representation setting out the interpretation of the respective lease clauses, the Expert awarded that only the works that 3SIXTY had deemed necessary should be undertaken. The claim was therefore reduced by a substantial 92%.

This case just goes to show that with dilapidations claims on the increase, it is important that occupiers ensure they are suitably represented when it comes to dilapidations matters.

It is critical that early intervention via expert advice is sought to handle this specialist and complex matter, rather than leaving to firms who merely "dabble" which often frustrates matters to no single parties benefit.

Dilapidations - a sign of the times!

By: Dan Wallis

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