Dilapidations

Dilapidation is the “exit cost” to the tenant of putting the building back into repair and reinstating alterations at the end of the lease.  These costs frequently come as a shock to the tenant.

This is an area of growing dispute between landlord and tenant as the lifespan of a building’s specification becomes shorter and shorter.  We advise upon the valuation and legal issues that influence the level of a dilapidations claim at lease expiry.

Navigating a dilapidations claim goes much further than the schedule prepared by a building surveyor.  It is the skill of the negotiator that ensures success.  We are experienced negotiators in this field and are most suited to bringing this about.

Case Study

Harlow House, High Wycombe

The case involved a 1980s office building of 8,000 sq ft.  Allsop acted on behalf of the tenant on their dilapidations obligations ahead of the expiry of their lease.  Our objective was to manage a trouble free exit from the building at the most favourable cost to the tenant either by way of a cash settlement or by carrying out the works through competitive tendering.  Time, however, was extremely tight with only two months between receipt of client instructions to act and the lease expiry date.

The landlord’s Claim amounted to £185,000.  Careful scrutiny of the Schedule of Works within the landlord’s claim suggested that they had not properly reflected the condition of the premises at the commencement of the lease recorded by a Schedule of Condition.  Tender documents were swiftly prepared and dispatched to three contractors for competitive tendering of the work which we considered to be necessary.  A contractor was selected and negotiations followed with the landlord’s agent, seeking his agreement to the removal of items from the claim that fell outside the tenant’s repairing obligations, with the purpose of reaching a cash settlement. 

Following resistance to our proposed final schedule of works it proved impossible to explore a negotiated settlement with the landlord.  With a contractor waiting on standby to carry out the works we advised our client that the most cost effective way forward was for them to carry out the necessary works at the competitive prices already agreed with their contractor.  The client vacated just in time to allow the contractor access for a 20 day programme of reinstatement works.

The total cost for discharging the dilapidations obligations was £60,160, saving the client £124,840 from the landlord’s original Claim.

The client was delighted by the outcome and the speed in which the dilapidations issue was executed in the short time frame that we were faced with.