Tag Archives: dilapidations defence

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.


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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-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.

Dilapidations Lancashire.Landlords-protect your position (Dilapidations Claim)

dilapidations,the practical surveyor,building surveying

Tenants often sign up to leases of premises and never have any contact from their landlords except to receive rent and insurance demands or participate in rent reviews.

How many Landlords conduct periodic inspections during the Lease to make sure their Tenants are complying with their obligations to repair and decorate.

Properly drafted leases usually oblige the Tenant to keep the premises in repair and to decorate periodically. So why let the Tenant get in arrears in respect of repairs and decorations. 

Redecoration particulary externally is  preventative maintenance and stops corrosion or wet rot decay developing to the point where replacements are necessary.

Electrical installations should be periodically inspected , tested and certified.( Usually every 5 years in the case of older installations). Gas installations should be annually inspected and tested and certified. How many Landlords ask to see these during the currency of the lease?

No usually what happens is the condition of the premises is not on the Landlord’s agenda until lease end. Then a Surveyor is sent in and lo and behold the premises have years of backlog maintenance and repairs outstanding. Decorations have been neglected for years .The cumulative costs of these arrears can be eye watering to a Tenant. In times of economic downturn the solvency of the Tenant can be questionable.

Landlords check your leases and more than likely there will be provision for the Landlord to gain access for periodic inspections to review the state of repair and decoration of the premises. If the Tenant is in default of obligations serve an interim repairs and decorations notice requiring the Tenant to take corrective action.

Try to ensure the final inspection is about 12 months before lease end so a Notice can be served and the Tenant has adequate time to sort matters out. The Landlord’s requirements for any reinstatement matters can be spelt out to the Tenant who then cannot rely on defence of insufficient notice.

The need for weighty dilapidations claim ( and ensuing dispute) will be much reduced. The risks of the Tenant going belly up and leaving the Landlord to pick up the tab is limited to a maximum of 12 months neglect

So to recap Landlords protect your position by:

  1. Periodic check inspections of the premises during the currency of the lease
  2. Use Repair and Decorations Notices to make sure the Tenant does not store up arrears
  3. Arrange for last periodic inspection to coincide with last 12 months of the lease term
  4. Arrange for terminal schedule of dilapidations to be served on the Tenant in last 3 months of the lease term.

This should protect your position.

A bespoke drafted lease at the outset is helpful and I shall discuss this in some future post.

 

WOW ( words of wisdom):

Never let out so much of the rope you are holding as you are prepared to lose.

avoid repair and decorations arrears
avoid repair and decorations arrears

Dilapidations Lancashire .Practise safe sex? Well practise safe leasing! (Avoiding dilapidations claim.)

Dilapidations,dilapidations claim,dilapidations schedule

Sexual health self-assessment

Ok ladies and gentlemen take this short test to find out whether your sex life is putting your health at risk. How much do you really know about safe sex practices?

What ?I thought this was about surveying !!!

I apologise for the hook but I have your attention and the analogy is true. 

Lease and wealth self-assessment for the tenant.

Take this short test to find out whether your lease is putting your wealth at risk. How much do you really know about safe leasing  practices?

1.OK you have just lined up a hot sexy date. ( Found some attractive premises to rent)

1. Have you any idea what the risks are and just what nasty STDs you can catch? (Have you any idea what your lease requires you to do in respect of repairs, decorations and reinstatement. )

2. Did anyone explain to you just exactly what you might be exposing yourself to?

3. Ok you are just about to jump into bed ( sign a lease)with a complete stranger the mistress or toyboy( The Landlord).You think this is going to be free of liabilities once the coupling is done( lease term). Are you sure you are not going to catch something nasty and unexpected as a result? A LTD! (Lease Transmitted Disaster)

4.The mistress or toyboy (Landlord) can be very seductive and entice you into that bed with all sorts of charming and alluring behaviour and promises ( rent free period )

5. Bang the deed is done. The lease is signed.( less than 30 seconds)You have had unprotected exposure. ( You have signed to the lease and you are contractually bound by seemingly innocuous clauses in a bewildering legal document). Have you done this?

6.The LTD might not show for years but when it does it was all because you engaged in  fumbled hurried unprotected leasing. Don’t you just feel stupid? (Your wealth is going to be seriously affected.)

OK.  STOP NOW!! Do not become another victim of ignorance. Practise safe leasing and take precautions.

As an expert dilapidations surveyor I have worked for some of  the largest and most successful businesses and commercial property managers in the NorthWest. ( Iotech Group Ltd,  Stax plc,  James Hall & Co Spar Stores).

I have acted for the same and many similar businesses where they are Tenants of commercial properties. Leading NorthWest Solicitor practices regularly refer their clients to me.

I have provided expert defence to end of long lease claims against Tenants of up to £1.3 million ( subsequently agreed in the case 0f the £1.3m claim at £650000.)

I have undertaken  dilapidations surveys on behalf of my clients for the past two decades. I understand exactly where Tenants can be most vulnerable to claims at the end of a lease.

I am by experience both a poacher ( for Tenant) and a game keeper.( for Landlord)

If you have neglected to deal with you repair and decorations liabilities, unfortunately the only defence you have available to you at the end of a lease is to engage an  Dilapidations Expert like me and hope that the landlord is not going to be too agressive . ( Hopefully the Landlord has also engaged an  inexperienced dilapidations  surveyor to act for it if you are lucky)

This is damage limitation only: far better not to have put yourself in that situation in the first place.

OK .What is involved in practising safe leasing?

  1. Employ the best specialist Commercial Property Lawyer you can afford( I mean seriously experienced and not the sadly all to often generalist solicitor regurgitating or cut and pasting old leases-come on guys who really gives credibility to  ‘ye shall whitewash distemper  marble and paint’)
  2. Employ the best specialist Dilapidations Building Surveyor you can afford to carry out a pre-lease inspection of the premises and prepare a comprehensive Ingoing Tenant’s Schedule of Condition.This will be in written photographic ( including elevated birds eye ) and increasingly HD Video format and preferably a combination of all three. ( It is if I carry it out.)
  3. Ask your Dilapidations Surveyor to give you an executive summary and advice as to just what are the major issues as to current repair and decorative liabilities and liabilities to be addressed  at lease end.
  4. Negotiate with the Landlord for the Landlord to correct existing defects or give rent free period monetary equivalent for you to keep ( and to put) and the premises in good tenantable repair. But do not then forget to sort matters out.
  5. Or if the Landlord will nor put hand in pocket to repair ( despite possible healthy cash injection from previous sucker tenant) seek to agree to limit your liabilities to repair and surrender the premises at end of lease in no better or worse condition than an agreed attached Ingoing Tenant’s Schedule of Condition. (And it better be very comprehensive! The landlord can seek to attack you with the ferocity of a rabid pitbull.)
  6. Maintain  repair and decorate during the lease term and certainly well before lease end. It far cheaper for you to commission these works. If you have altered the premises or added to the same without landlord’s consent reinstate the premises. Why give yourself a problem and the Landlord a chance to go for that handy cash injection?
  7. Engage a Dilapidations Surveyor to examine the lease and check over the premises and see where you might be exposed to claims for repairs and decorations and plan backwards from date of the end of the lease and implement a programme of remedial works.

I am an Expert Dilapidations Surveyor with over 25 years experience.  If you need help contact me.

I have recently provided safe leasing precautions by preparing a comprehensive schedule of condition of the whole of a multi-hectare site with significant and complex industrial buildings. ( Multiple written schedules, 8 CDRoms of Photos and 2 hours HD  DVD Video).

No LTDs for that Tenant!!! ( provided of course they reasonably maintain and decorate to prevent deterioration from recorded condition)

WOW (words of wisdom)

Simple isn’t it?

The prescription:  Take sensible precautions and enjoy safe leasing to your heart’s content.

 

 

On matter of Terminal Dilapidations Claim ( Landlord’s handy cash injection). Avoiding Dilapidations Claim

Reviewed an overstated Landlord’s claim today for terminal dilapidations (wants of repair and decoration) at end of commercial lease on industrial premises. My client ,the former tenant, is naturally worried by the staggering amount claimed. ( A third the capital value of the premises)

Moral of tale 

1.Take professional advice from experienced Building Surveyor before Lease on the condition of premises and  by commissioning and attaching a schedule of condition  to the Lease. 

Limit liability to yield up  the premises in no better or worse condition than evidenced by the Schedule

Too late you didn’t do this?

2. Put your house ( or rather the premises ) in order whilest you are still in occupation. Listen to your Surveyor and act on his advice with regard to reducing your potential exposure to eye watering claim

Too late you didn’t do this?

3. Come and see me and I will see what I can do to reduce the scope and amount of claim ,but be prepared to contribute to your former landlord’s bank balance to greater extent than would have been necessary.

Next time do not be a fool and blind to your potential liabilities.

Obtain the best solicitor’s and surveyor’s advice and guidance you can afford before signing that Lease.

I think in the current case I can help and negotiate the claim down. There are certainly some aspects of the claim not covered by the lease covenants and others are clearly overstated and exaggerated.

WOW( words of wisdom)

As you know prevention is always better than a cure.