Dilapidations - tips for tenants when moving premises

The natural tendency when a business moves is to focus on the new premises.  However, when a lease comes to an end a tenant will usually face a claim from their landlord for the cost of repairs and redecoration necessary to put the property into the condition that the tenant was required to leave it in under the terms of their lease. 

This is known as a dilapidations claim.  Such claims can be substantial but we set out below some tips for tenants to minimise their liability.

• When taking a lease of new premises, consider obtaining a Schedule of Condition and ensure that your repairing obligations are limited to leaving the property in no worse a condition than at the start of the lease.  If this was not done for your current premises, consider doing it for your new premises, particularly if they are not in the best condition at the outset.
• Act early.  If you have a good relationship with your landlord and you address the issue early enough, you may be able to agree on a schedule of works to be carried out before the end of the lease.  Alternatively, you may wish to consult a surveyor yourself at an early stage to advise upon the works required, so that you can get those works done before the end of your lease, rather than being left trying to negotiate a settlement figure with your landlord following the service of a Schedule of Dilapidations at a later date.
• On receipt of a Schedule of Dilapidations, consider getting an estimate from your own contractor for the cost of carrying out the works required.  This can be a powerful negotiating tool.
• Make enquiries as to your landlord’s intentions for the property.  You are likely to have defences to a dilapidations claim if the landlord, or an incoming tenant, is intending to carry out works to the premises themselves in any event.
• Seek professional advice on receipt of a Schedule of Dilapidations.  Landlord’s claims are invariably put at their most optimistic and significant savings can often be negotiated.

Acknowledging and addressing the issue of dilapidations well in advance of the end of your lease and taking a proactive approach is ultimately likely to result in a much better outcome and a reduced liability.

If you would like further advice or assistance in relation to dilapidations please contact Keith Songhurst.

Keith Songhurst
01245 453821
keith.songhurst@birkettlong.co.uk