Tag Archives: dilapidation report

Dilapidations Lancashire-When to keep means to put. Rough waters ahead.

Rough waters ahead for ignorant tenants.

Sadly many commercial Tenants are ignorant of what their lease terms mean. If for one moment someone explains clearly  the innocuous phrase ‘to keep’ in repair means implicitly to ‘put into repair‘ that deal on cheap lease in a  leaky Victorian north-light factory does not seem so good. ‘To keep‘ means to put your hands into your own pockets and spend hard earned cash on putting the premises in repair.Great for the Landlord. Not so great for the Tenant.

To keep in repair?

Oh and do not think you can fold the Company to escape liability- most leases require the old PG–  the personal guarantee from Directors or others.

WOW (Words of Wisdom)

Always take professional advice from a Chartered Building Surveyor before Lease who can work with your Solicitor to ensure you do not unwittingly sign up to an onerous and costly burden. You now know it makes sense.


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Dilapidations Northwest- Leading solicitors Weightmans tell it as it is in their Commercial Property Focus newsletter

A Poor State of Affairs

The Rise of Dilapidation Claims

Matthew Williamson says in Weightmans newsletter :

“Over the past couple of years, the number of dilapidation claims served by landlords against tenants has risen dramatically. Dilapidations are the tenant’s cost of reinstating a property back to the condition required by the lease. Claims have increased because the recession has limited the redevelopment of commercial premises; in a stronger market landlords may just demolish premises that were in a state of disrepair, now they are forced to spend money repairing and redecorating and want to claim that money back from their tenant…………..”

Matthew Williamson is an associate in the commercial property team at law firm WeightmansLLP     

Full article can be found by clicking below. All rights reserved.

Commercial Property Focus 2009


Dilapidations Lancashire- Are you an ostrich?

Ignorant of what is in your lease?

A client rang me recently and his 10 year lease ends July 2010.He admitted he had no idea what his lease required of him in terms of repairs decoration and reinstatement!
Seemples- RTF******L  –   read the lease and plan backwards. Do not expect the Landlord to trigger you into action with a Schedule of works. Take control , extract head from sand and address your liabilities while you can. It is so easy to get wrapped up in your business that repairs and decorations to the building can seem  a gross inconvenience. There is a natural reluctance to budgeting for repairs and decorations to a building you do not own. However neglect to attend to those responsibilities and it could be very costly.
If you cannot work out a strategy to minimise your exposure to claim you know where to come.

WOW (Words of Wisdom)

Ignorance is not bliss when it comes to commercial lease liabilities.

Any Tenant of a commercial premises under the covenants of a typical ordinary lease will be expected to keep the premises in good repair and regularly decorated. You must repair and decorate as the lease specifies.There is usually a restriction on alterations without permission. So if you add or takeaway something you will be liable to reinstate and make good.

Do not file the lease away in the cabinet. Get it out and check what it says, preferably in good time before lease end .

You generally have no rights to hang over at lease end to sort matters out unless of course you want to carry on paying rent! The Landlord may not agree to your hanging over anyway.


Dilapidations Lancashire- A video is worth 10000 words 500 digital photos and a wedge of money saved.

I come across from time to time poor and impoverished Schedules of Condition prepared on behalf of ingoing Tenants comprising pretty basic and limited written schedules and  photographs.-an attempt to limit the Tenant’s liabilities to a condition no better or worse than recorded at the time of Lease was the probable brief. Gosh these must have been prepared  years ago before digital camera technology I hear you say. Often yes , but  I have had to try to defend terminal dilapidations claims on basis of schedules prepared as little as 5 years ago meeting this description. It is hard work as it seems the object of dispute is always just outside the field of view of the photograph. Sod’s law. I can interpolate a lot from overall state of repair and decoration shown on a series of photographs but there is nothing better than a comprehensive visual record which leaves no room for arguements between Surveyors often many years down the line. Digital photography technology allows us now to take hundreds of photographs and store them on  SD cards or similar cards the size of a postage stamp or DVD disc . ( CDs very rarely these days have enough space to store sufficient high-resolution photos).

Even hundreds of photographs might not be enough. To address this issue we have adopted and use the best of technology to now prepare definitive Schedules of Condition comprising comprehensive written descriptions of defects, cross referenced high resolution photos ( minimum 9MP) and High Definition Video  (AVCHD) . A HD video is priceless for recording complex defects and conveying the condition. Run on your common place HD TV on say a 42″ screen the HD video reveals all. I started last year when faced with prospect of recording condition of 4.5 acre industrial site of complex buildings of many varied types. It worked and I provided multiple DVDs ( about 2.5 hours of video )to compliment digital photos and written schedules. No arguements in 10 years time at lease end.Period.  Sony  or other commonly available Blue-Ray players or even Sony ps3 play the discs beautifully.

I have now adopted the procedure for more modest commissions. Why accept anything less? OK it costs extra in time and effort and cost but the definitive record is priceless to resist overstated dilapidations claims at lease end. My aim is to make it as far as impossible  to pursue a legitimate claim for disrepair where limitation as to condition at time of lease is of essence.No system or approach is perfect but my clients will always be assured I shall continue to strive to perfect my method using the best of technology available.

They may not know it for 5 or 10 years but they will reap the benefit .

Seemples?

WOW  (Words of wisdom)

Limit your liabilities by definitive ingoing Tenant’s schedule of condition.

HD video is an invaluable part of such schedule.

You know where to come.



Dilapidations Lancashire- Landlords and Tenants do not get floored by claims or losses at lease end!

Dilapidations Lancashire,dilapidations expert

A constant source of arguement between Landlord and Tenant (and their Surveyors )at lease end is about carpets and other floor coverings. Do they fall under the Repairing covenant? Are they loose or fixed . Are they glue fixed or on gripper rods? Who put them in?

When is a carpet in repair any way?  If you walk across a carpet lots of  times it will inevitably wear. Put desks and furnitute on top of carpet and it will indent. Sunlight streaming in through windows will cause fading. Spill coffee tea ink toner etc and it will become soiled. Walk in with dirty shoes and you will get grimy footpath trails associated with personnel traffic through the premises.

Ok so the tenant tries cleaning the carpets. They may be cleaner but what about the fade patches and uneven wear associated with wheely chairs and foot tapping staff at desk positions?

At the outset of the lease consider the issue of floor coverings and set down precisely how carpets and floor coverings are to be dealt with at lease end.

Landlords if you want all floor coverings renewed at lease end expressely say so at the outset and record in the lease.  Specify the type and quality.Do not hope the repairing covenant will cover. Why should you provide new coverings and let someone abuse them- the floor coverings are a diminishing assest anyway.  Fact- they will soil and wear and fade. Period.

Tenants if you do not want to renew floor coverings at the lease end or pay for them expressely say so at the outset and record in the lease. Do not take premises with pre-existing shag (ged) carpets and floor finishes and sign up to repair covenant to keep in repair because you can not keep in repair a worn or faded carpet or sheet vinyl floor.. You will inevitably face claim for new floor coverings.

Both parties to the lease should carefully determine at the outset their respective positions and expectations about future liabilities for floor coverings and expressely agree and record how they will be dealt with at lease end – include a specific paragraph in the lease. -something like  ‘the Tenant will at before lease end renew all carpets and vinyl floor coverings or pay to the landlord the costs of the same at lease end.’ or ‘the tenant will have all carpets and other floor coverings cleaned in last 3 months before lease end or pay to the landlord the costs of the same at lease end but will be under no obligation to replace any floor coverings.’

dilapidations lancashire, dilapidations expert

WOW ( words of wisdom)

Landlords and Tenants should determine how floor finishes will be dealt with at lease end and agree liabilities and expressely set out in lease.

Leave nothing to interpretation in years down the line. Save ££££££ in claims or losses.

 

Dilapidations Lancashire-Exercise some flexibilty in these trying times…..a hangover could cure your headache

Dilapidations,dilapidations expert

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.

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