Commercial Property Dilapidation and Repair Disputes
Landlords and tenants of commercial properties often run into disputes relating to dilapidations and disrepair towards the end of a lease, and disagreements arise when the two parties fail to agree on what constitutes dilapidation and disrepair.
Even though you may have a contractual agreement concerning the upkeep and care of the property, this can often be a complicated area of law if the initial agreement is not absolutely clear and unambiguous. Most problems occur when commercial tenants and landlords have different expectations of the provisions in their lease, or tenants are not fully aware of the rights and obligations they are subject to.
At Lupton Fawcett, we have a team of commercial property dispute solicitors who are accredited members of the Property Litigation Association, who understand the challenges that you face when dealing with dilapidation and disrepair disputes. Although these cases can often be contentious, they need not be overly difficult and generally we are able to resolve them without having to go to court.
We will put you first, offering practical, specialist advice to help you to settle your dispute as quickly and easily as possible.
What is a dilapidations dispute?
Leases of commercial property generally contain clauses concerning dilapidations. These require the tenant to keep the premises in good repair, and outline the obligations of the tenant, both during their tenancy, and when their lease ends. Tenants are obligated to rectify any disrepair or damage to the property, and to ensure that any damage is made good when the property is relinquished at the end of the lease.
Tenants may sometimes feel over faced when looking at a schedule of dilapidations, which is a legal document that can be highly detailed and difficult to fully comprehend. If you are a tenant with concerns about any of the stipulations in the schedule, we can assess whether the expectations on you are fair and reasonable. You may be able to challenge them, but it is vital that you seek advice before signing any lease.
If a tenant fails to meet their obligations, they can be taken to court, and if found to be in breach of their agreement, may be liable to pay not only for the cost of the repairs, but also for court costs. A landlord may be awarded damages relating to any decrease to the value of their property as a result of the tenant’s actions. We will always endeavour to resolve dilapidations and disrepair disputes through negotiation – but if this is not possible, we will pursue court proceedings on your behalf.
How can dilapidation and disrepair disputes be avoided?
Good legal advice prior to entering into a commercial lease is essential, for both landlord and tenant; a clearly set out agreement at the outset will minimise the chances of any misunderstandings over what each party’s obligations are. Most agreements will state that a tenant must keep a property in “good repair” – but there is no fixed or clearly defined meaning of the term in law. Because of this, agreement on what constitutes “good repair” can become a grey area if what is expected has not been clearly outlined at the start of a tenancy. Having a Schedule of Condition drawn up can minimise the likelihood of any disputes; it is a detailed photographic report, prepared by surveyors which clearly outlines the condition of the property at the outset of the lease. While having this report prepared is an additional cost initially, having this as a record can be invaluable, and is likely to save money and time if a dispute arises later in the tenancy, as you are able to provide visual evidence of the expectations for your tenant.
It’s also good practice for a commercial landlord to ensure that the tenant is meeting their obligations during the tenancy, as this will make sure that any potential issues are flagged up to both parties and can be addressed in good time. Likewise, a survey of the property towards the end of the lease can identify any issues, giving time for the tenant to rectify them in good time, and minimising any costly delays to the landlord when the time comes to re-let the property.
Steps towards resolving a dilapidation and disrepair dispute
If a tenant has failed to carry out work to repair any dilapidations or disrepair by the time their lease ends or, alternatively, agreed to pay for the cost of having those works carried out, then the landlord can expect to have the cost of the reparations reimbursed. If a tenant refuses to pay, or disputes the costs, then the landlord may need to take legal action to claim damages.
It is important for a landlord to follow the necessary protocols (or pre-action protocol for claims for damages), if it becomes necessary to make a dilapidations or disrepair claim against a tenant. The Dilapidations Protocol sets out a framework for landlords and tenants to follow, which is designed to encourage an early settlement of the dispute without further legal proceedings. A claim can be made either towards the end of a lease, or after a lease has ended, although time limits apply, and normally a claim cannot be made more than 56 days after the end of a lease.
A landlord should:
- Have a qualified specialist surveyor prepare a schedule of dilapidations. A buildings surveyor will identify items of disrepair which need to be made good by the tenant and will estimate the costs involved in putting the issues right.
- Consider carrying out the repairs themselves after the tenant has left the property, depending on the circumstances. This can be advantageous to the landlord, as it shifts the burden of proving loss to the tenant and will also possibly minimise the possibility of a delay in re-leasing the property.
Both parties should:
- Check the lease; this will set out what is recoverable in terms of damages and fees.
- It may be helpful for a tenant to instruct their own surveyor, who can correspond with the landlord’s surveyor. If both parties and their surveyors can liaise and communicate, they may be able to come to an agreement mutually. Often, the majority of disputes are settled at this stage, with a sum of money being agreed upon to cover the cost of repairing the dilapidations.
- Any alternative forms of resolution are worth investigating – courts look more favourably upon claims where it can be demonstrated that both parties have tried everything that they can to resolve the issue in advance.
How Lupton Fawcett Can Help
At Lupton Fawcett, our property dispute solicitors have extensive experience and a proven track record in this area of law. We will provide you with practical and honest advice, and will guide you through the process of making a claim relating to dilapidation and disrepair disputes, ensuring that you know what your options are and the best steps to take to resolve matters quickly with minimal stress.
We’re based in Yorkshire – but we regularly support clients throughout the country.
We offer a bespoke service and can work with you, whether you are a landlord or a tenant, whatever the size of your business. Whether you’re already involved in a dispute, or you think that you may potentially have issues with an upcoming lease, contact us as soon as possible for a consultation. We will always aim to settle disputes as efficiently as possible, avoiding court wherever we can.
We provide a personalised service, with sector specialists and extensive resources to ensure we are giving you the best solutions to your problems.
Our Commercial Property Litigation Solicitors act regularly for clients across the United Kingdom including Bradford, Birmingham, Hull, Leeds, Liverpool, London, Manchester, Sheffield, York and Nottingham. We can support your needs wherever you live in England, Wales & Northern Ireland.
For a no obligation initial consultation please either call the office or leave your details using the contact form at the top of this page. We’ll be happy to help.