Creative advice with a commercial focus on managing dilapidations risks
Landlord tenant relationships can be complicated, especially when it comes to deciding whether the tenant has looked after the landlord’s building properly. Even agreeing what the lease means in practice is often an area for expert interpretation, and that’s before the mass of case law and dilapidations practice needs that need to be considered.
Both parties need strong advocacy based on the right mix of technical knowledge and negotiating skill. We have unique advantages as dilapidations specialists; access to in house experts like mechanical and electrical engineers, façade consultants and environmental experts, so our advice is always detailed and comprehensive. Then, we’re building experts. We know what it takes to repair and maintain everything from a Medieval timber frame to a high spec city office tower. We have in house cost consultants too, working day to day in the construction market, so our pricing is always accurate and reliable.
However, the extra value we create comes from knowing the nature of the wider property market – as only a full-service surveying firm can do – because dilapidations is a lot more than merely about how much a repair costs.
Finally, and most importantly, we approach dilapidations from a commercial perspective. Working hard to achieve the best outcome for our clients, using all our experience representing both landlords and tenants, in each case seeing the world as they see it.
Main Contacts
Dilapidations Services
Landlord
Interim and terminal schedules of dilapidations
We can assess your property at any point during the lease and advise on the state of repair. To prevent your position as an investor from being damaged we can enforce the provisions of the lease that deal with the tenants’ duties to keep the building in repair. This typically happens at the end of a lease but can be necessary or prudent at any time. We also look at what the tenant has done about statutory compliance, alterations to the building and what reinstatement is needed at the end of the term.
Once prepared and served on a tenant, a formal schedule of dilapidations becomes the basis of a negotiation where we act to get the best settlement for you. It’s where our knowledge of dilapidations law and practice gives you a real advantage.
Strategic advice and lease breaks
Successful dilapidations negotiation is based on a strategy that balances the tenant’s lease obligations against your future plans for the building. At the same time, understanding which repairs, if neglected, will reduce the value of your property is key for setting the right approach from the outset. Time and again we have been able to show the benefits that come from this early strategic involvement.
A strategic view on dilapidations is essential where leases include break clauses; often exercised at times of tension between the parties, expert guidance on dilapidations can give you a powerful weapon in any negotiation.
Claim Negotiations
Dilapidations negotiations are a complex process with a need to have an adept knowledge of dilapidations law and protocol, defect diagnosis and construction costs. We understand the nature of negotiations and the strict obligations that are imposed and know how best to achieve results that align with your core objectives for the asset.
Dilapidations works management
If your tenants don’t complete the works they are obliged to, you will need to carry them out yourself. We can do this for you. It needs careful management to ensure you are not left short on recovery against what is spent. Frequently, you might want to make improvements at the same time and this requires distinct separation during procurement.
Occupier
Dilapidations assessments and strategic advice
We can defend you against any claims that you’ve failed to meet your obligations to repair, redecorate and reinstate the property you lease at any time during the term, as well as managing risks associated with break clauses or expiry.
We can make sure you comply with the latest lease accountancy code (IFRS16) and maintain an accurate assessment of your liabilities on the balance sheet. We can do this with a single property or portfolios on a regional or global basis. We work with clients globally and our EMEA dilapidations guide can be downloaded here.
Claim negotiations
Dilapidations negotiations are complex, based around dilapidations law and protocol, expert defect diagnosis and a knowledge of current construction costs. We know how to achieve the best results for you.
Our wider property market experience means we can add extra value for you because dilapidations is about a lot more than simply the cost of repairs.
Dilapidations works management
Whilst you might prefer to reach a financial settlement with your landlord, our early strategic advice can give you other choices. Doing the work yourself might be a lower risk and a better economic approach to meeting your liabilities. This needs careful management to ensure you do enough to meet your obligations but don’t exceed them. We can interpret leases accurately and manage contractors in site to ensure tight cost control and that only what is necessary is done.
Dispute Resolution and S18 Valuations
Dispute Resolution
Dilapidations is a complex and contentious area that frequently leads to disputes which require formal resolution procedures.
We can support you to settle dilapidations disputes through:
- Expert witness
- Mediation
- Arbitration
In any of these processes we can also provide technical support from a range of in-house experts, from mechanical and electrical engineers and facade consultants, to environmental experts specialising in areas such as contaminated land risk.
S18 Valuations
Dilapidations damages are capped at the loss in value to the landlord resulting from a tenant’s breach. This loss is assessed through a specialist area of valuation practice known as S18 valuations under the Landlord and Tenant Act 1927 (or Diminution in Value Assessment outside of England and Wales)
Few practitioners offer this skill because it requires knowledge of the specific market for the building.
Our extensive coverage means we can provide the best S18 valuation experts for every market and representation for landlords as well as tenants.
Case Studies
Rackspace
1 Hyde Park Hayes
A £6.02m claim reduced to £15k
Brookfield
City Point
A successful landlord’s claim
