How to Avoid a Big Dilapidations Bill

Of course, in your line of work, you’ll have seen it all before. And unlike those starry-eyed tenants, you’ll be only too well aware of the cost ramifications heading their way in the form of end-of-tenancy dilapidations. So, you’re particularly well placed to advise them about the potential costs they could be facing further down the line.

More than just a lick of paint

Left to their own devices, most commercial tenants tend to assume that their responsibilities to the landlord are mainly a repaint and a repair of any obvious damage. It’s certainly a reasonable assumption to make. But unlike your clients, you have the benefit of knowledge to see potential pitfalls with obscure dilapidations clauses in tenancy agreements!

Things are always so much easier when surveyors are brought in before the start of the lease. This gives you plenty of time to assess the property’s condition before the tenant moves in. You might suggest a Schedule of Condition as a good starting point, particularly where there’s already a lot of work that needs to be attended to at the property.

It’s a little trickier when you’re consulted towards the end of the lease, as you’ll be working with a contract already in place. But you can still reassure your clients that they won’t necessarily be landed with a hefty dilapidations bill at the end of the tenancy. By assessing the current condition of the premises, and by studying the full terms of the lease, you may be able to advise them of ways to minimise their financial responsibilities.

Keeping repair costs down

You might encourage your client to organise some repairs before the end of the lease. This could be cheaper than negotiating with the landlord for the repair work to be carried out. Explain that regular maintenance checks will identify problems before they become critical, which also minimises repair costs.

Remind your clients not to overlook the roof of their building, as problems tend to occur out of sight with the potential to cause huge amounts of damage before they’re spotted. Taking a proactive approach can save greater expense further down the line. Our specialist roof coating products can help to prevent water damage, including protection against cut-edge corrosion. Our roof products are BBA Approved and protect against weather extremes, high impact and dirt resistance.

When checking a property for dilapidations, always ensure your clients are advised in advance of the potential cost of repairs. Remind them that timely maintenance is always the best route to avoid any issues arising between landlords and tenants.

For advice on protecting industrial roof systems, please contact our Giromax team. Call 01455 558969 today or make an enquiry.

Always Check Clauses in Commercial Leases

Consider potential repairs from the outset

Right at the start of the lease, paying out for dilapidations may not be at the forefront of either party’s minds, so you’ll need to advise them of what’s at stake. Overlooked clauses could amount to some extremely costly claims once the lease comes to an end.

Most commercial leases require the tenant to maintain the premises in a good state of repair. The actual definition of what’s required needs to be laid out clearly, so that both parties are fully aware of their responsibilities. In some instances, you may decide to recommend a Schedule of Condition be attached to the lease, which could limit the tenant’s obligation for certain repairs.

At the end of the lease term, as a dilapidations specialist, the landlord may have opted to send you in to conduct a thorough inspection of the property. Any resulting Schedule of Dilapidations will detail every single breach of the repair covenants, leaving the tenant with the option to action the necessary repairs, or to reimburse the landlord for them. So, what happens if your client is the tenant?

Tenant defences against paying for dilapidations

If your client is a tenant looking to avoid paying for dilapidations, you could guide them in a couple of useful directions. For example, the tenant may decide to make use of section 18 of the Landlord and Tenant Act of 1927 by electing to repay dilapidations only up to the amount that the property is devalued by the need for repairs. This amount could be considerably less than the actual dilapidations schedule might suggest.

Tenants may also avoid paying for dilapidations when the landlord intends to demolish or alter the premises following the expiry of the lease. Some form of proof will be required, such as the granting of planning permission, or approval of building regulations for change of use. Simply believing the intention is there is not sufficient to challenge a demand for dilapidations to be paid.

Whether you’re acting on behalf of a tenant or a landlord, remind your client to undertake rigorous checks of every part of the premises. Roof systems are often out of sight and out of mind but may result in costly and time-consuming repair work.

When advising your clients with regards to dilapidations, always remind your clients to carefully check any clauses in the lease to avoid any legal issues arising.

If your clients need advice on maintaining an industrial roofing system, please ask them to contact our Giromax team. Call 01455 558969 today or make an enquiry.