posted 7th December 2023
Dilapidations is a term which refers to the condition of a property during the period of occupancy or when a lease ends. It is a crucial concept in the realm of property management and leasing agreements. Dilapidations is governed by s18 (1) of the Landlord and Tennant Act 1927 under (provisions as to covenants to repair).
A dilapidations claim will relate to breaches of the tenant's repairing and maintenance obligations in the lease. When these issues arise, it is the responsibility of the tenant to address them and to restore the property to the condition outlined in the lease.
Failure to do so can result in dilapidations disputes and serious financial consequences, such as the right of the landlord to seek damages from the tenant.
In our article, we'll look at what dilapidations mean for a commercial tenant and how they can avoid the financial headache of a dilapidations claim.
What It Means for The Occupier
As a responsible tenant, it is crucial to understand the concepts of dilapidations and schedule of conditions to ensure a smooth leasing experience.
Dilapidations typically arise from terms which are outlined in a lease agreement. When signing any commercial lease agreement, the first thing an Occupier should always look for is to minimise their dilapidations liability. This is particularly important where the condition of a property is poor.
Occupiers must be responsible for ensuring that the state of a property is kept in good repair and condition to avoid disputes and to ensure a fair assessment of any repairs. This is where a schedule of conditions plays an important role.
A schedule of conditions is a comprehensive record of a state of the property at the beginning of a lease. This is important for both the landlords and the tenants as it sets a baseline against which the property's conditions can be assessed when the lease term concludes. We would always recommend that a schedule of conditions is limited to photographic schedule of condition. After all, a picture is worth a thousand words.
A clear understating of both dilapidations and schedule of conditions is essential for both the landlord and the tenant. Whether you're a property owner or a tenant, being informed about these processes is a key to maintaining a positive and collaborative relationship in the world of real estate.
GS Verde Law provides focused and strategic commercial property advice that ensures you as a commercial tenant can remain compliant and avoid any dilapidation claims and disputes. Our team advises across a range of commercial property issues from new leases and lease renewals, to surrenders and terminations.
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