Dilapidations can be extremely contentious processes following the termination of a commercial lease agreement, but as a landlord you must remember that dilapidations are there to help protect you and your property from the actions of your tenants. Towards the end of your lease agreement, you may find it necessary to undertake a dilapidations survey on your commercial property. What are your rights as a property owner, and how will your property be protected? We have all the answers to those questions and more here…
What are dilapidations agreements for?
Dilapidations agreements are primarily put in place for the benefit of you, the property owner. When you presented your tenants with the initial lease contract, it will most likely have contained repairing obligations, making your tenants liable for the condition of the property, decoration covenants designed to ensure that they keep the building in a presentable state, and alteration and reinstatement clauses, stipulating that any amendments to the property be restored to their original state once the lease comes to an end. These legal clauses are designed to ensure that, when your current tenants vacate the building, your property remains in the same rentable condition it was before they moved in.
What happens when your tenants move out?
At the end of the lease agreement, your tenants will vacate your commercial property. Before this, it may be necessary to notify your tenants that you plan to enforce any dilapidations agreements to return the property to the same condition it was in before they rented it. A building surveyor will produce a schedule of dilapidations that sets out what repairs, renovations or redecorations are necessary, and how much each will cost. If a tenant refuses to honour this agreement, either party may pursue legal action to determine what a fair settlement is and enforce payment.
What processes must you follow to pursue dilapidation payments?
If you feel that the terms of the dilapidations agreement have not been met or that any repairs and amendments are not of the required quality, you may find it necessary to take further action. It’s in the favour of both parties to settle the matter out of court, but if your tenants refuse to make the changes you’ve requested and you feel you may have been wronged, it could be necessary to take the matter to the proper authorities. Typically, we advise our clients to carry out property inspections prior to the end of an agreement, which allows time for dilapidations disputes to be settled out of court, in a shorter timescale and at a lower cost.
What happens should the matter go to court?
If your dilapidations dispute goes to court, you’ll need to provide evidence of the agreement itself and also evidence of the condition of the property following the most recent tenancy. Based on the evidence and testimony provided by yourself and your tenants, the court will hopefully rule in your favour and the tenants will be required to pay for the dilapidations and often also cover your legal fees. There are instances, however, when natural processes such as subsidence or the poor condition of the property itself have resulted in a dilapidation, sparing tenants from the responsibility of repairs. In some instances, all is not lost here as some insurance agreements may cover the cost.
As you can see, dilapidations are often complicated, contentious and difficult to resolve, but with the help of our dilapidation surveys you’ll have nothing to worry about. Our dilapidation surveyors will help to identify where your property has been damaged or altered and where your tenants are liable for repairs, and they can even be used to help you win any resultant court case. To find out more about how our dilapidation surveys can help you, contact us today and we’ll be happy to share more details.