Tenants are well advised ‘to put their house in order’ before lease end or face potential dilapidations claim for breaches of lease covenants to repair redecorate and reinstate. But what happens if they do not plan backwards and arrive at the end of the lease with little or no time to carry out works? What’s the Landlord to do? What’s the Tenant to do?
Well the Landlord can take back the premises and initiate a dilapidatons claim with all the risks, expenses and delay and uncertainty especially if the Landlord is not intending carrying out the works. The Tenant’s diminution valuation defence looms large : you know the one; OK so the costs of repairs are £25000 but the value of the premises is only reduced by £5000 or nothing!!!
Alternatively with a little flexibility on the part of the Landlord the Tenant might be able to negotiate to hang over on bare licence after lease end to carry out the works and surrender the premises in repair and decorated.
The Landlord gets what he should want ,which after all should be his premises given back in tenantable repair and freshly decorated; the Tenant gets what he wants which should be to take control of costs and minimise his exposure to claim and discharge his lease liabilities.
I would not advocate this as a strategy for Tenants to adopt as it is certainly very risky, but I would certainly as I have recently done, commended Landlords to consider allowing the same.
After all in these trying times why as a Landlord should you run the risks of not recovering the full costs of repairs and decorations if you can accept some modest delay and get the active co-operation of the Tenant in sorting matters out with all the risks as to costs his?
In my locality prospective new Tenants are hardly beating the doors down of commercial agents to sign up for new leases of commercial premises and certainly not those which are visually run down and poorly decorated.
Just a thought…..
WOW ( words of wisdom)
Landlords should not automatically plunge headlong into confrontational dilapidations claim. Think about your objective. Your interests may be best served by flexibilty in encouraging the Tenant to sort matters out even at the cost of free hangover after lease end.