Glossary of Terms
The process of dilapidations can be complex without experience, and there is a lot of industry-specific terminology that can make it difficult for the uninitiated to follow.
In our dilapidations glossary, we will outline some of the key terms and definitions that you will need to be aware of in order to understand the processes in full.
Betterment – claimed works/remedy which is an obvious upgrade and what would ordinarily attend to that item and/or which totally overrides (supersedes) that item (or several items).
Chartered Surveyor – there are many distinct types/disciplines, with two necessary in Dilapidations cases. Firstly, the Chartered Building Surveyor (CBS) to identify and price/cost breaches (remedial works due to non-compliance with lease covenants to repair, decorate and/or reinstate Tenant’s works). Secondly, the Chartered Valuation Surveyor (‘Valuer’) to advise if the statutory cap applies, i.e. that the Landlord’s damages for the breaches will be determined by the impact of the freehold value being less than the cost of works.
CPR – Civil Procedural Rules (within which the Protocol is incorporated).
Diminished Value (DV) – the amount (if any) by which the Landlord’s freehold ownership interest in the Property has been reduced due to the breached covenants in the (expired) lease to repair, decorate and reinstate (alterations by the Tenant).
Filters – these are the two ‘filters’ (each of likely Supersession and items Not Value Affective) applied by the Valuer to the CBS’s Schedule (Cost of Works).
Quantified Demand – otherwise called the Schedule of Dilapidations, or Scott Schedule, this is the Landlord’s claim for damages for (alleged) breaches on a priced item by item basis.
Schedule of Condition (SoC) – whilst it is often thought/claimed that reletting of a property with a Schedule excluding the new tenant from attending to listed remedial works, affects the Freehold Value. However, often it does not.
Schedule of Dilapidations – see Quantified Demand in dilapidations glossary.
Scott Schedule – see Quantified Demand in dilapidations glossary.
Supersession – where a claimed item of work is likely to be overtaken (destroyed) by what the (hypothetical) landlord will do to upgrade/alter the property.
Survival – these are the claimed/agreed items costed by the CBS which ‘survive’ the two filters (Supersession and NVA).
Value-Affective (VA) – term used to denote a claimed costed item which, for the Property in question, is likely to ‘survive’ as otherwise commensurately impacting the otherwise full value if not done. Seldom, if ever, are all claimed and costed items – even though agreed to be breaches with a remedial cost by both Building Surveyors – actually VA. Each case will be considered on its own merits, but commonly many are not Value Affective (NVA).