Dilapidations Two for the Price of One

Dilapidations Two for the Price of One

call-us-nowPrevention is Better than Cure

Free Lease Advice

One of the areas where we feel we can offer the best advice is when a lease is being taken by a tenant. This is not the most exciting and glamorous part of setting up a new business, but it is essential.

How we can help you now, when you are buying the lease

The service we offer is a two tier service. We offer a Commercial Building Survey of the property, where we look to ensure the leasehold property that you are taking on does not have any hidden time bombs that will cost you a fortune / possibly your business / possibly your house (if you are having to put this up as collateral for the lease); this is traditionally what Chartered Building Surveying practices do.

What we can do to save you money now and in years to come

However, we are well aware, from having to defend leaseholders in three months, three years, five years or ten years time, that the preparation of a Schedule of Condition as well, on ‘day one' of the lease, will enable you not only to lease a property that won't cause you problems while you are in the property and will also enable you to extract yourself from the lease without it costing you too much.

Commercial Advantage – Two for the Price of One

This is where we feel our ‘two for the price of one' Property Report and Schedule of Condition gives you a commercial advantage. Not only does it enable you to review your options when taking on the lease, with regard to the property, it also offers you a Schedule of Condition for when you want to extract yourself from the lease.

My Lease Terms Don't Allow a Schedule of Condition?

We come across this issue time and time again; where when you come to lease a property you are advised that a Schedule of Condition isn't allowed to be added to the lease. We would first of all say that this is where your negotiation skills come into play, as most landlords are prepared to have a property let with a Schedule of Condition than not let at all; although in a poor or average market you are in a very strong position to negotiate Schedules of Conditions being attached / appended to lease agreements. In a strong or booming market landlords tend to have the upper hand, apart from with very specialist properties and therefore can assist and ensure that a Schedule of Condition is not appended to the lease.

You Need Some Sort of Schedule of Condition

We come across tenants who have leased a property for three months, three years, five years, ten years plus, who when they come to leave the property (known as ‘yield up') they wish that they had had some sort of Schedule of Condition carried out on ‘day one', as inevitably the landlord will present them with a Dilapidations of claims for repairs on the property and tenants then wish they had had a Schedule of Condition based on ‘day one' condition to help with negotiations. Bear in mind that even the friendly landlord that you have today may need to serve the Dilapidations as a way of bringing the property up into a condition that he feels will make it more rentable. Equally, the friendly landlord that you have dealt with for years may have sold on to a less friendly landlord only a few months ago, as happened in one of our recent cases, and one of the incentives for the new landlord buying was that a Dilapidations was about to be served. Or, alternatively, on a larger property estate it may well have been sold on to a business with a completely different view on property, for example, we are often coming across leases originally written up by brewing companies who have then stopped the brewing side and became retail outlets or indeed sold to retail outlets who later then sold on to fully fledged property companies, who do look at dotting the i's and crossing the t's, and are very strict to the terms of the lease which, when they were originally agreed, life was very different and yet you as the tenant are still stuck with performing to the conditions set out within the lease.

Why Wouldn't the Landlord Serve a Dilapidations?

This is the question that we feel you should always ask yourself when taking on a lease; why wouldn't the landlord serve a Dilapidations? It is his opportunity to bring the property up into a good marketable standard (even if it wasn't like that when he leased it to you), equally it can be argued that with many landlords they have rented out perhaps at a time when they couldn't achieve the best rents and the Dilapidations at the end of the lease is the moment they have been waiting for, when they can negotiate not the works to be carried out but a sum of money which will be their profit on this property. In fact I read an article recently where it said that sometimes the Dilapidations is the only way the landlord makes money on a property, therefore they are very keen to serve a Dilapidations Notice.

The Landlord has Nothing to Lose by Serving a Dilapidations Notice

It is a very standard clause within all the leases that we see that the tenant pays for the cost of the landlord serving the Dilapidations Notice. The tenant will pay for the specialist Chartered Surveyor that deals with the dilapidations, the specialist solicitor that deals with the dilapidations and any time the landlord's company spends on the dilapidations together with any time builders spend on the dilapidations. These terms are normally in the thousands and this is without the cost of actually doing the dilapidations work.

We Come Back to ‘Prevention is Better than Cure' – A Pre Lease Service

We help you on ‘day one' to make sure you have the right leasehold property by carrying out a Commercial Building Survey and we help you in the last months of your lease by preparing a Schedule of Condition on ‘day one' to ensure you can extract yourself from the lease with as little pain as possible.


We look forward to having an informal chat with you.

1st Associated.co.uk

0800 298 5424