Schedule of Dilapidations
The term dilapidations, is normally used to cover defects or disrepair which a tenant will be required to deal with or pay to have remedied when they vacate the premises that they have leased.
Before a tenant takes a lease, a survey will establish the condition of the premises, giving an indication of work that may be needed, both immediately and later. If the premises are already in bad repair, special considerations apply. Otherwise, any defects are reported in what is termed as a Schedule of Dilapidations.
When is the landlord likely to submit a dilapidations claim?
Generally speaking, landlords do not serve dilapidations claims earlier than three years before the end of the lease.The reason is simple: the Mortgage Valuation report is prepared for the lender – not for you, the borrower. It answers only the lender’s questions concerning the appropriate security for your loan. You cannot rely on it to answer the questions which concern your Personal interests.
If a tenant has a statutory right to a new lease, the landlord probably will not serve a dilapidations claim unless or until they indicate that they are unlikely to renew their lease.
What happens if the tenant does not accept the landlord’s dilapidations claim in full?
A tenant may seek professional advice if the cost is considered to be inflated or the claim may include items which are not valid items of disrepair.
The Landlord may not in fact intend to repair the property; he or she might plan to demolish it. In this case the tenant would have a good defence at law to the claim.
If the tenant and landlord cannot reach agreement, the landlord has recourse to the court. But this is a slow process and expensive for both sides. Landlords will generally avoid it if they can.
We suggest a consultation with a solicitor as well as a chartered surveyor if things look like taking this course – in a court hearing your chartered surveyor will be able to act as an expert witness on your behalf.