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Dilapidation Services
"'Dilapidations' refers to breaches of lease covenants that relate to the condition of a property during the term of the tenancy or when the lease ends."
RICS 2013
What are dilapidations?
Western Building Consultants can expertly advise both tenants and landlords in regards to dilapidations claims in Bristol. These typically arise at the end of the lease and it is extremely important that both the tenant and landlord take professional advice to ensure the claim accurately reflects reality.
Dilapidations are items of disrepair or defects which tenants are required to rectify or pay to have remedied under covenants contained in a lease.
Leases typically allow for dilapidations claims under the lease for repairing covenants, decorating covenants, covenants to comply with statute/regulations or covenants which require reinstatement of a property to a specified standard at the end of the lease.
What is the extent of the tenant’s obligations?
The use of the phrase “In repair” includes an obligation to put the property into repair if it is in disrepair at the start of the lease. To limit potential problems a tenant may try to limit their liability by reference to a Schedule of Condition. Alternatively, the tenant may insist on a lower rent to reflect the costs of putting the premises into repair. The standard of repairs required will depend on the length of term, age and location of the property. An obligation to keep in good condition can require works to be carried out even if there is no disrepair. A covenant to keep the property in good repair and condition is more onerous than good repair alone. An obligation to repair will not usually require the tenant to make improvements – whether something is an improvement will involve a consideration of whether the works create something recognisably different from what would have resulted if the disrepair had merely been remedied.
What can a landlord do if premises are left in ‘disrepair’ at the end of the lease?
During the term of the lease, the landlord’s remedies include a claim for damages, forfeiture, re-entry for the landlord to repair and then re-charge costs to the tenant and specific performance of the terms of the lease. Not every one of these remedies will be appropriate on every occasion.
A claim for damages is the landlord’s only remedy once the lease has expired and it is subject to a number of limitations.
What damages can the landlord recover?
The landlord can recover the reasonable cost of undertaking the works plus loss of rent including service charge and rates for the period until the works have been completed. However, the amount claimed will be subject to a cap on the level of compensation claimed in accordance with Section 18 of the Landlord & Tenant Act 1927 which provides that damages are limited to the diminution in the value of the landlord’s reversion caused by the breach. Damages will also be limited or possibly not recoverable at all where it can be shown that the property is to be either demolished or where significant structural alterations are to be carried out which render the repairs pointless at the end of, or shortly after, the end of the term.
Any breach of other covenants (including decoration, reinstatement of alterations etc) are not limited by section 18 (unless the breach also constitutes a breach of the covenant to repair) and the damages will be assessed according to common law principles.
DWF LAW 2012
If you are a landlord or tenant in Bristol and need to discuss a dilapidation case please give Western Building Consultants a call to discuss how we can help. For more information on dilapidations please click the link below.