We act for a variety of Landlords ranging from individuals to property companies and investment funds. Advice can be provided on the most appropriate ways to ensure your Tenant complies with their Lease together with the preparation of a detailed schedule of a Dilapidations or Quantified Demand.
WHAT IS A SCHEDULE OF DILAPIDATIONS?
Schedule of Dilapidations is a document which the Landlord would prepare to notify the Tenant of the works needed to comply with the terms of a Lease. Whilst the Landlord does not have to prepare a Schedule before the Lease has ended they may have to notify a Tenant of any reinstatement works needed to ensure terms of a Lease are met. Many Landlord’s also prefer to prepare and issue a Schedule before the end of the Term to ensure a Tenant is aware of the works they must undertake before the Lease ends and in some cases to enter into dialogue in agreeing a monetary settlement.
WHEN IS THE SCHEDULE PREPARED?
A Schedule of Dilapidations can be prepared at any time during the Lease and during a term it is often known as an Interim Schedule of Dilapidations or a Repairs Notice and this would highlight specific issues of concern to a Landlord where a Tenant is not maintaining the property to an acceptable standard. At the end of the Lease the Schedule is known as a Terminal Schedule of Dilapidations or Final Schedule of Dilapidations and this identifies the works which the Landlord requires at the end of the term or if a Lease has ended it identifies the works which the Tenant should have undertaken. The Schedule is based upon the detailed wording of the Lease, which will set out the Tenants obligations in terms of repairing, reinstating and decorating the property together with complying with relevant statute and any other express obligations which were agreed when the Tenant took the building.
View our Landlord Dilapidations Case Studies
OTHER RELEVANT DOCUMENTS
When preparing a Schedule of Dilapidations, a Landlord’s Surveyor must have due regard to all other documentation including any Licences to Alter, side letters, assignment agreements or any specific obligations set out in an Agreement for Lease.
It is important a Landlord’s Surveyor makes specific reference to all associated documentation as a claim can only be made for a breach of contract. Hence the terms of this contract are the terms of the Lease or any associated Deeds.
WHAT IS A QUANTIFIED DEMAND?
A Quantified Demand is the final claim a Landlord would make after the end of the Lease and this is usually based upon a Terminal Schedule of Dilapidations. It is prepared in accordance with the PLA Dilapidations Protocol and the RICS Guidance Note for Dilapidations in England and Wales, 7th Edition.
The Quantified Demand could be prepared by the Landlord’s themselves, based upon the information provided by Bradley-Mason LLP or we can also compile and submit this claim on your behalf. It would include a costed Schedule of Dilapidations and would also consider a Landlord’s future intentions for the property, whether the claim would be reduced by the Landlord’s future intentions for the site and also include any supporting documentation such as terms of a new letting or marketing particulars. In essence, it is the basis of a claim to prove the Landlord’s loss for breach of contract (the Lease) owed by the Tenant.
WHAT IS AN INTERIM SCHEDULE?
An Interim Schedule of Dilapidations or a Repairs Notice is something which a Landlord may want to serve during the Term if they feel a Tenant is not looking after their property correctly. As with any Dilapidations Claim the Tenants obligation is based upon the specific wording of the Lease and we can prepare a variety of notices which will remind a Tenant of their obligations.
In some cases, a simple letter is a cost-effective way of notifying a Tenant that there are some outstanding issues and that these will be addressed. In some cases, a more formal Schedule is needed to identify the specific issues of concern and identify the works the Landlord requires. In some cases, the Landlord may have already notified the Tenant themselves and a Tenant has refused to implement any work. In these cases, we can advise on how the terms can be enforced, whether by serving a Section 146 Notice to threaten forfeiture of a Lease or serving a formal Repairs Notice.
Since the case of “Jervis v Harris” the Landlord now has greater ability to enter a Tenants property undertake the works and re-cover the cost as a debt if there is provision in a Lease. This is often taken very seriously by Tenants who do not want a Landlord entering the premises and implementing works. We have acted for several Landlord’s where our Project Team have specified and tendered the works and by a Tenants Agreement the works are implemented, sometime by combining similar work to several adjoining properties to achieve best value for both Landlord and Tenants.
The Landlord does however have to be mindful that a Tenant has various legal protection, depending on how Interim Repairs are enforced, in particular under The Leasehold Property (Repairs) Act 1938.
IMPLEMENTATION OF THE WORKS
As part of the preparation of a Schedule of Dilapidations we would often recommend that the required works are specified and tendered to a select list of competent contractors. This ensures there is a firm and known cost of the works to form the basis of a claim and allows works to progress as soon as the Lease ends or an agreement is reached.
Our Project Management team regularly work with our Dilapidations team to offer advice on the Procurement of Works and would then project manage the implementation of the Dilapidations to ensure a property is ready to re-let in the shortest possible time.
OTHER HEADS OF CLAIM
In addition to the cost of works it may be possible in some circumstances to claim for other costs incurred by a Landlord or losses suffered owing to the Tenants breach of contract. There are various scenarios and implications which affect what can be claimed although it may be possible for a Landlord to claim for the loss of rent incurred whilst works are specified and implemented and other costs may be reclaimable including professional fees, Solicitors fees and any costs incurred in investigating the condition of the property eg, electrical test, drainage surveys etc.
IS THE TENANT LIABLE TO COMPLY WITH LEGISLATION?
In conjunction with preparing a Schedule of Dilapidations our specialist compliance team can also provide advice on works needed under the terms of the Lease and also to re-let .What can be claimed under a Lease will depend upon the wording of the Lease Agreement and whilst there is often an overall requirement to comply with all Legislation and sometimes only applies during the Lease term, with only a limited amount of compliance requirements after a Lease is expired. There is however often a requirement to provide confirmation that items such as electrical systems and gas appliances are in a safe and compliant state and that as part of implementing the works statutory costs would be incurred for example preparation of a Refurbishment and Demolition Asbestos Survey and compliance with the CDM Regulations. At Bradley-Mason LLP we combine the skills of the various disciplines to ensure a Dilapidations Claim is fully supportive with the correct professional advice.
HOW IS A DILAPIDATIONS CLAIM MANAGED?
At Bradley-Mason LLP we firmly believe that an open and pro-active approach between parties will usually lead to an optimum agreement for both sides. By early dialogue and discussion it is usually possible to reach a settlement figure or agree the Scope of Works without recourse to the Courts and our approach is very much in line with the guidance set out in the PLA Dilapidations Protocol.
Our Dilapidation Surveyors have many years’ experience of preparing Dilapidation settlements and our strong negotiation skills aim to reach settlement without confrontation. In some situations, a conflict cannot be avoided and we are often brought on board after a dispute has already arisen between parties. In these cases, we can act as Expert Witness for a Landlord in progressing a case to Court or whether a case is managed by Arbitration, Mediation or any other type of Dispute Resolution.
Julian and his team provide a great building consultancy service with high quality and thorough reports to quickly to suit the needs of their clients. It’s reassuring to know that you’ll always get a quick reply and the full attention of whoever is dealing with the enquiry.
Jo Hedley – James Hall & Co Properties