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Date posted: 02/02/2017

Defending dilapidations in commercial property

A standard commercial lease agreement requires the tenant to take responsibility for keeping the property in “good and substantial repair” during the term of the lease. Chartered Building Surveyors at Delaney Marling Partnership want to warn local businesses that dilapidations can be an expensive oversight for those who don’t pay close attention to the terms of the lease.

It is very common for landlords and tenants to argue about property repairs. The heavy burden of dilapidations can often last for many years and items such as roofs, windows, electrics and heating are costly to maintain. Delaney Marling Partnership stresses the importance of a Schedule of Condition to avoid the need to defend a terminal schedule of dilapidations on behalf of a tenant, where no schedule of condition has been produced at the commencement of the lease.

Kevin Marling, director at Delaney Marling Partnership says:

“We are delighted to see that the property market is rapidly improving in Hull and East Yorkshire. With new transactions taking place, we are also busy as schedules of condition are extremely important to determine the exact state of the various elements of the property, which will seriously affect/limit the tenant’s obligations for repair. The proviso that their repair obligations are ‘that the premises are to be kept in no better condition’ than evidenced by such a schedule of condition. This means that even if a tenant has improved the building, with new walls, heating systems, etc, they could be required to return the property to its original condition.”

“In some cases a schedule of condition has been prepared in the form of a photographic report to provide evidence at the commencement of the lease. Issues with photographic schedules arise when the photographs taken are far too general, and do not exactly pin-point a location. Photographs and plans will generally be insufficient on their own and no substitute for a written report.”

“If a business owner has been handed a dilapidation claim it can be defended by Chartered Building Surveyors such as ourselves. Claims can run into tens of thousands of pounds but recently we have halved a recent claim for dilapidations from 80,000 to 40,000. In the 8 years we have been established we have acted for clients on various claims to help them reduce the burden of their dilapidation claims, some of which were significant.”