Dilapidations Lancashire-Terminal Claim for £100500 managed down to £2400!

Facing a big claim?
Facing a big claim?

A Tenant client of mine rang Jones & Co from his newly acquired position standing on a window ledge facing the prospect of a self- propelled precipice drop.

‘I have received a Terminal Schedule of Dilapidations claim for £100500! We have only occupied the premises for 5 years and now this bombshell…what can we do?’

I duly took instruction  calmed him down and helped the distraught Tenant step back from the window ledge .

I conducted a review of the Claim which included an inspection of the premises and detailed examination of the Lease. The Tenant was indeed bound by fairly standard lease with liabilities to keep the premises in repair, redecorate in the last three months of the lease and not to have made any alterations without consent.

The Tenant had unfortunately not been advised before Lease to have a Surveyor prepare an Ingoing Tenant’s Schedule of Condition . This would have served two purposes : to ascertain condition and for attachment to Lease to limit liabilities to keeping the premises in no better or worse condition. The operative words in the repairing clause ‘to keep’ meant that where the premises were already in disrepair the tenant would assume liability to put into repair. A common and often very expensive mistake.

‘Not fair’ I hear the cry so many times. Well you are a big boy or girl and you are entering into a legal commercial contract so why did you not take the best legal and surveying advice at the outset?

This Tenant fortunately contacted Jones and Co with a couple of months left in the lease and there was just enough time for action. The review of the claim revealed a fair number of item requirements for repair were indeed potential legitimate claims.  I was however in disagreement with a significant number of items which I considered either outside the scope of the lease requirements and were not the Tenant’s liability or were simply overstated. eg Replace rooflights £10000when a clean and reseal would suffice. Replace colour coated metal barge boards £5000 when  a repaint only was necessary. You get the picture.

I prepared a  formal Review of the Claim and identified legitimate liabilities and matters to address. Doubtful items were identified and I suggested these items were worth arguing. I recommended a strategy and response. Acting on the advice the Tenant determined to effect works of repair and decoration and reinstatement to mitigate his own exposure to the potential dilapidations claim.I prepared a Schedule of works I considered he should address . He took control of costs and with professional advice carried out works of repair and redecoration which were considered reasonably required by the Lease and not all those required by the Landlord’s Surveyor. Upon vacation of the premises I prepared a full Photographic Schedule of Condition recording the condition. Always do this as it can save arguements later as it indeed did.

The premises looked pretty smart at lease end and all credit to the outgoing Tenant  a good job had been done and fair amount of money spent but nothing like the amount of the potential claim! There was nothing prejudicial about the vacated condition which might be offputting to a potential new Tenant- which is of course dear to any Landlord’s heart and wallet.

'Left pretty smart upon vacation.'
'Left pretty smart upon vacation.'

Congratulations all round you would think? Effusive thanks from Landlord? No. A revised Claim  for £25400 only.

‘Hell fire or f*** me ‘ as actually uttered by the ex- Tenant! Understanadble.

My client duly contacted me and requested I negotiate settlement which I duly did. The majority of the items still claimed were challenged and argued against.The claim was reduced to £20500 but they would ‘settle for £10000 ‘( getting desperate). I considered £1750 plus VAT equivalent was fair and reasonable ( being majority Landlord’s Surveyors fees for the merry dance we all had enjoyed)

Well suffice it to say the matter was finally settled at around £2400. Result!

WOW (Words of Wisdom)

A small industrial unit- a big dilapidations claim
A small industrial unit- a big dilapidations claim

1. Always take best experienced and informed professional legal and surveyor’s advice before lease

2. Always commission an ingoing tenant’s Schedule of Condition (and do not forget all engineering services.)

3. Always negotiate repair and decorations liabilities. Spell out just exactly what you are prepared to take on and expressly exclude all matters you are not.

4.Keep your house in order and do what you have contracted to do in respect of repair and redecoration.

5.Take control of costs and plan backwards from lease end date and allow sufficient time to put the house in order. Take advice from your Surveyor as to strategy .

6.Always seek advice when you receive  a Repairs Notice or Schedule of Dilapidations. The Landlord’s Surveyor’s requirements may not properly reflect the actual liabilities.

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