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Following expiry of a Lease, the measure of damages to remedy dilapidations is broadly the reasonable cost to the Landlord of doing the works plus loss of income whilst the works have been completed.
The landlord may wish to issue an interim schedule of dilapidations during the course of the lease to protect the value of their property and ensure that proper maintenance is being carried out. An interim schedule will generally be less detailed than a terminal schedule or final schedule, but it can nonetheless help avoid the accumulation of serious neglect which might leave the tenant facing the prospect of unexpected liability.
The landlord would carry out a review of lease documentation, including any license for alterations, schedules of condition, easements and right granted over the property.
Schedules of condition are important documents that factually record the condition of a property, usually at the outset of a lease. We would always advise our client to ensure a good quality schedule is in place to protect the positions of both parties. When effectively used, a schedule of condition can limit liability and therefore limit the costs involved.
The site investigation enables our practitioners to consider the breaches of covenant and consider equitable solutions to remedial works.
Site investigations may require input from various different disciplines, including M&E, Environmental, building structure and access specialists to inspect specific areas of a property.
Schedule of dilapidation is an established practice, used to schedule out the dilapidation process in a tabular 'scott schedule' format to allow parties to track items that are part of the process.
In the UK, there is a wealth of legislation and case law that governs commercial dilapidations. We have a highly trained team of experts that can interpret this information and apply it to the particular lease in question.
Here we need to understand what works are likely to be undertaken, as there is statutory guidance relating to the Landlords intentions for the property at the end of the term. The Landlords intentions, particularly with regards to redevelopment and renewal have significant impact on the scale and scope of the remedial works required of the Tenant. We therefore, need to understand the scope of the Landlords works to establish how much of this work is the absolute the responsibility of the tenant. It is through careful consideration of these works where we can consider concessionary items/alternatives. There are a multitude of mechanisms at our disposal to prove or disprove the various arguments of Landlords and Tenants; our skilled Chartered Building Surveyors are well versed in this process and this experience enables us to achieve exceptional results for our clients.
Dilapidations is a long-established process in Commercial Real Estate and many of the principles are enshrined in Case Law. Our Chartered Building Surveyors endeavour to draw on their knowledge and experience to resolve 'disputes' in an amicable and expeditious manner to both parties in every instance. It is often the case that the Landlord wishes to implement a more grandiose scope of works than the Tenant is responsible to pay for. It follows that the apportionment of Tenants contributions can be a contentious issue, particularly with regards to Betterment, and our skilled negotiators work in the interest of our respective clients to achieve favourable results.
Break notices are often an achilles heel of tenants wishing to vacate the premises. It follows then, these can be a master play for Landlords. Our experiential approach and early engagement in the process, can enable the development of a strategic approach to property and portfolio management.
Once all reviews and investigations have taken place and all concerned parties are happy, we can move to reach an agreement on rates, areas and/or breaches.
We can tender and undertake the work during the term and the highly trained team of chartered surveyors at Bemerton Consulting can start to support you through the property process.
The dilapidation process can be daunting for both landlords and tenants. Hopefully, this timeline gives you an insight into the steps involved and the works we can undertake on your behalf.
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