Schedule of Dilapidations

Regulated Surveyors by RICS, CIOB and RPSA

Who is a Dilapidations Surveyor?

A dilapidations surveyor prepares a report on the condition of a property at the end of a lease term called the Schedule of Dilapidations. The surveyor’s report details the work that a tenant must do to put the property back into the condition it was in when the tenant first moved in — the tenant must do this work as under the terms of the lease. 

The work can include anything from redoing the woodwork in a room and painting over it (redecoration, in the real estate business, is referred to as “reinstatement”), to fixing what had been a bad repair done to part of the property. The report is a guide for the tenant to use in figuring out what must be done and is not done (dilapidated, in surveyor language) during the term of the lease in order for the landlord to be in compliance of the lease when the tenant moves out.

Dilapidation claims can be filed while you are still under a lease or at the very end of your lease. Here is what you need to know about this potentially costly aspect of commercial leasing: how to resolve disputes, follow obligations and how you can prevent Dilapidations claims.

A Landlord's Schedule of Dilapidations

When you have a tenant who is responsible for fixing damage to your property, you may need to create a Schedule of Dilapidations. So, how do landlords and tenants ensure that they come to a fair outcome?

If a tenant is liable for restoring alterations and repairing covenants outlined in the lease, the landlord’s surveyor can draft an up-to-date, meticulous, and comprehensive schedule of dilapidations for the landlord. In such instances, the landlord’s surveyor can also negotiate with the tenant’s surveyor to achieve an amicable settlement. If the tenant contests the dilapidations claim, the landlord’s surveyor can act as a professional representative for the landlord and serve as an expert witness in court.

A Tenant's Schedule of Dilapidations

When preparing to sign a new lease, the first thing to understand is the clause in the lease that relates to dilapidations and what it means for you. The team of dilapidations surveyors can help you with that in a straightforward manner. 

If you plan to make changes to your rented property, the team can prepare a detailed Licence to Alter for your landlord and negotiate any disputes that may arise. If you are served with a Schedule of Dilapidations, the expert panel will help you understand what it means, your responsibilities, and the potential costs involved. If you disagree with the landlord’s position, the surveyors will help flag that up and will assist you in composing a response. If all else fails, our surveyors can appear in court on your behalf and act as an expert witness.

The need for Dilapidations Survey in Manchester, London, Bristol, Birmingham & Cardiff

Typically, a landlord retains a chartered surveyor near the end of a lease, someone who can investigate the property and come up with a Schedule of Dilapidations if necessary.

Serving a Schedule of Dilapidations is not a hard and fast rule, but generally speaking, it is served near the end of the lease. It not only establishes information that is helpful in case any claim arises, but also gives the tenant time to carry out reinstatements or repairs before lease end. The team can help both landlords and tenants with the following:

  • Recoup financial losses
  • Verify the accuracy of the claims filed by the landlord
  • Fulfil responsibilities as a tenant
  • Settle differences quickly and economically
  • Avoid the courtroom

The Schedule of Dilapidations offers a clear picture of where the tenant is in breach of the lease. It sets out, in detail, the work needed to remedy the situation (and if you’re the landlord, be sure to include the cost of repairs and any loss of rent during the repairs). If the Schedule doesn’t do its job and the tenant remains in breach, the landlord can claim damages via what is known as a “Terminal Dilapidations claim.”

In addition to containing the detail of the landlord’s loss (if applicable), a Schedule of Dilapidations can also itemize the remedy needed to bring the leased property back into compliance with the terms of the lease. If a formal valuation is needed (for whatever reason), the landlord can also obtain one under Section 18 of the Landlord & Tenant Act 1927 at any time.

What does Schedule of Dilapidations contain?

A Schedule of Dilapidations is made up of several components integral to a landlord’s claim. These components have to do with cost, responsibility, and the financial implications of disrepair. The following matters comprise a landlord’s claim in a Schedule of Dilapidations:

  • When a landlord has a dilapidation claim, the first thing to do is to issue a Schedule of Dilapidations.
  • The items in disrepair are itemised.
  • The specific responsibilities of the tenant are described.
  • Claims for loss of rent may not be made unless there is evidence to support the claim.
  • Refurbishments are not included in the claim.
  •  Damage amounts are limited.

If you are a Tenant and receive a Schedule of Dilapidations, what Actions should you take?

If you are a tenant and receive a Schedule of Dilapidations, respond immediately and thoroughly. 

First, communicate with your dilapidations surveyor to find out which repairs—if any—are truly necessary and relevant to your lease. 

Second, perform the repairs that are necessary, reinstate any alterations you made to the property, and otherwise return the property to the condition it was in at the start of the lease.

If the landlord maintain the view that you have infringed the lease and have failed to repair the necessary items to return the property to good condition, the landlord may file suit against you for damages. Your surveyor should help you draft a counter-argument and keep the landlord’s possible claim within the limits of the Dilapidations Protocol.

Preventing a Schedule of Dilapidations Claim as a Tenant

As a tenant, it is essential to fully grasp what your obligations are before you sign or renew a lease. You shouldn’t have any surprises later on regarding what you may be held accountable for pertaining to the condition and upkeep of the premises. Surprise claims for full repair at the end of a lease term can amount to a great deal of money.

Before you sign a lease, read it very carefully and pay particular attention to any language that appears to impose full repair obligations on you. If you’d really rather not pay the kind of money that some of these claims can amount to, consider hiring a Chartered Surveyor before you sign!

Take extra caution when dealing with properties that are ‘Listed Buildings’. They present their own unique and often fixing-resistant issues, such as windows that won’t open, roofs that leak, and damp issues that, by the time you’re aware of them, have begun to effectively retroactively waterproof the interior. This is not your fault but may lead to extra damage. 

If you choose to go ahead and sign a lease for the property, insist on a Schedule of Condition from your surveyor that has been agreed to by the landlord.

Keep all documents in a safe place, and make sure you perform good maintenance while you are living in the property.

Advising Landlords about Dilapidations in Manchester

It is sensible for landlords to carry out regular property inspections during the lease term. This helps them ensure that tenants comply with the lease terms. Tenants may sometimes need reminding about maintenance and repair issues.

In the lease agreement, it should stipulate that the owner or management staff will conduct periodic inspections of the premises. These inspections may be done only with the tenant’s permission and, of course, will not occur more frequently than stipulated in the lease. Assuming that the tenant is fully advised of the reasons for inspection, the expectation set forth in the lease should lead to a good outcome. If the inspection reveals a problem, it should be addressed promptly.

When the problem leads to permanent harm done to the property, you may want to ask your building’s surveyor to prepare a Schedule of Dilapidation for you.

If the problem leads to enduring impairment of the property that hinders the landlord’s capacity to secure a new lease, to borrow money, or to recover his reversion, the landlord can to ask his surveyor to prepare an Interim Schedule of Dilapidation. This way he can demand that the tenant must conduct the repairs.

 In addition to the Schedule of Dilapidation, there is another Terminal Schedule of Dilapidation as well that can be served at any time. The Terminal Schedule of Dilapidations is designed to preclude the depreciation in the value of the Landlords property, due to the said breaches. 

The types of repair that the tenant may be required to do are often set out in a schedule that is attached to the lease, although not always. These include renewing old parts, carrying out repairs or removing fixtures.  The landlord is bound to keep the building in a condition suitable so the tenant knows which types of repair he is responsible for before signing the lease and certainly before moving in. Both parties avoid a dispute by knowing their repair obligations at the outset.

If the lessee does not perform the necessary repairs or corrective actions, the lessee will infringe the conditions of the rental contract as set out in section 146 of the Law of Property Act 1925. The landlord then will issue a Final Schedule of Dilapidations, which is tantamount to a fiscal indemnity since the lessee can no longer access the property.

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A Dilapidations Schedule is a legal document that helps enforce a property lease. It ensures that tenants uphold the lease provisions and return the property in good condition. It also serves as a means of protection and a method of countering the allegations of dilapidation that landlords throw around when they want to maintain undue pressure on their tenants to get them to do things that may be beyond what the lease really requires—because they don’t want to go to court.

If you need help with a lease agreement or require a drawing up of a Schedule of Condition or Dilapidations, contact our panel of experts today. 

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If you’re thinking of acquiring, leasing, subletting, disposing of, or altering commercial premises in Manchester, you would be well advised to locate a surveyor skilled in the nuances of commercial building surveying – should you spot a defect in a commercial building you can use that information to negotiate an asking price for the property that’s considerably lower than what the seller originally wanted, or you can talk your way out of a bad deal altogether. 

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