In this post Graham Halsall, Partner specialising in Property Disputes, sets out some top tips for tenants when pursuing a Dilapidations Claim.
Prepare a Schedule of Condition
When we talk about a “Schedule of Condition” we are referring to a record (typically including video and photographic evidence) of the state and condition of the property at the commencement of a lease. Its purpose is to record the previous condition of the premises so that when it comes to assessing the correct standard of repair at the end of the lease, the Schedule of Condition is the frame of reference.
Not all leases include a Schedule of Condition and therefore the correct standard of repair is often the subject to dispute. We would recommend that a Schedule of Condition is agreed and attached to the lease at the outset so that these kind of disputes can be avoided. This is particularly important when taking a lease of premises that are already in a poor state of repair and condition.
Limit your liability
The essence of a Dilapidations Claim is that the premises have fallen below the standard of repair and reinstatement required by the lease and the measure of damages is related to the remedial action required to bring the premises up to the required state and condition. Therefore, a tenant can limit its exposure by ensuring that the premises are properly throughout the lease. Do not wait until the of the lease (or even the last year of term) before assessing your liability under the lease. You do not want to give yourself too much to do at the last minute.
When you receive the Schedule of Dilapidations, there may be items of repair that you are able to carry out yourself at a fracture of the costs claimed by the landlord. This allows you to use your own contractors and choose the timing of the works.
There may also be certain works that need to be carried out within certain timescales – e.g. painting in the fifth year of the term. So, it’s always a good ideal to check your lease carefully as well.
It is equally important to keep records of all the steps you have taken to maintain and repair the premises and also any equipment that you are also liable for under the lease. This could be in the form of logbooks, testing certificates, service contracts, photographs, invoices and so on. The more evidence you have of the works undertaken, the better prepared you will be to face a Dilapidations Claim. This is particularly important in a Dilapidations Claim when there can be a significant period of time between the alleged breach and the claim(s) made by the landlord.
Check the notices
When it comes to the enforcement of a repairing covenant, whether as a Dilapidations Claim or otherwise, it is often necessary for the landlord to serve notices. This could be a “Section 146 Notice” (a statutory notice specifying works of repair or maintenance) or it could be a contractual notice under the lease to reinstate alterations. These notices have to be valid for them to have any effect and this is an area where technicalities matter. The obligation is on the landlord to get things right and therefore you should also check the notice and seek advice as to whether there are any deficiencies that might render it ineffective.
You also may need to respond to a notice in a certain way and by a certain timeframe. For example, it may be necessary to serve a counternotice under the Leasehold Property (Repairs) Act 1938 in order to claim the benefit of that statutory protection.
The Schedule of Dilapidations itself should comply with the Dilapidations Protocol.
Therefore, advice should be sought in relation to any notices of schedules which are served by the landlord in the context of enforcing a repairing covenant.
If you have any further queries regarding dilapidations please do not hesitate to contact Graham Halsall who leads the property litigation team in our Redhill office.
Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.