‘Dilapidations’ refers most commonly to a tenant’s liability for works to return a leased property to the landlord in a condition which complies with obligations for:
- reinstatement (stripping out) of the tenant’s alterations and fitting out works such as partitioning,
- repair/renewal of the landlord’s fixtures and fittings, such as lighting, ceilings and carpets,
- redecoration of previously painted surfaces and general making good following reinstatement.
Turner Morum assist clients with dilapidations issues in several ways:
- When negotiating to acquire premises we seek to minimise repair and reinstatement liabilities. If defects already exist then we can often obtain a Schedule of Condition to record and benchmark the state of the premises at the start of the lease and thereby limit the tenant’s obligations throughout the term and at expiry.
- During the course of the lease most corporate tenants need a forecast of expected dilapidations liabilities for accrual purposes within statutory accounts.
- Upon renewal or regearing of the lease, through ageing of the building it may be possible to reduce the current repairing liabilities as part of the deal.
- Towards the end of the lease, we develop a strategy to minimise dilapidations costs and help decide between carrying out necessary works or alternatively seeking a financial settlement with the landlord.
- Similarly where a formal Schedule of Dilapidations is served by the landlord during or at the end of a lease, we work on strategy to reduce or sometimes completely eliminate the landlord’s claim.
For further information contact Andrew Smith