Commercial Landlords, Is your tenant’s lease coming to an end?

Commercial Landlords, Is your tenant’s lease coming to an end? Is the property in a bad state of condition and repair? And, is the tenant refusing to put the property back into its state of repair as at the beginning of the lease? You may be entitled to make a dilapidations claim.

For many commercial landlords approaching the end of a commercial lease term, a serious concern is ensuring that the property is put back in the condition it was in at the commencement of the lease term.

Unfortunately, many tenants do not comply with their obligations to keep their premises in the standard of repair required by their lease. The extent of the tenant’s obligations and the remedies available to the landlord for any breach of these obligations are generally set out in the specific clauses of the lease.

This article considers in general terms the options available to a landlord when its premises have fallen into disrepair and the tenant is refusing to comply with its obligations.

What are Dilapidations?

Dilapidations is the umbrella term used to describe any damage incurred to a commercial (or in some instances residential) premises caused by a tenant during the period of their lease. Dilapidation claims are brought to cover breaches by a tenant of covenants under a lease, usually brought before or at the expiration of the lease. These damages can include, but are not limited to, repair work, decoration and reinstatement costs.

What remedies do you have?

It can be said that there are guidelines not tramlines. Ultimately, your remedy will be determined by the specific clauses in your lease. There are also a number of wider practical and commercial considerations such as the state of the property market and the financial position of the tenant.

The first step is to serve a terminal schedule of dilapidations prepared by a building surveyor setting out the damage and losses sustained by the landlord. There are three possible outcomes:

  • In an ideal situation liability is not in dispute and an agreed amount is paid to settle the claim.
  • Liability is not disputed however an agreement cannot be reached as to quantum.
  • The tenant denies any liability whatsoever.

How Millar McCall Wylie help/ What we do

Millar McCall Wylie’s Dispute Resolution team can assist you in seeking to obtain a favourable sum in respect of dilapidations by employing a range of dispute resolution mechanisms. In the event that an agreement is not reached out of Court, we have considerable experience and expertise in successfully issuing and defending Court proceedings in respect of dilapidations.

Are you a landlord seeking advice in relation to any aspect of making a dilapidations claim process, you can contact a member of our commercial team on 02890 200050.