A claim of dilapidations details the required costs of repairing a property back to its original condition at the time of the lease agreement starting. When a lease expires, a landlord is entitled to have the property in a state of repair as dictated by the details of the initial lease agreement.
Subtly different terminology is used in different parts of the United Kingdom & Ireland, but the principles and effect are similar.
The ‘Quantified Demand’ is effectively the Schedule of Dilapidations, which is a document prepared by the chartered building surveyor outlining alleged breaches of covenants to repair, redecorate, and reinstate.
The document, usually an Excel spreadsheet, will propose remedies along with costings for the remedial works (along with any claims for loss of rent, interest etc.). This Quantified Demand (Schedule of Dilapidations) is usually ‘served’ on the outgoing tenant by the landlord’s solicitor.
Responding To A Dilapidations Claim
The tenant should engage their own chartered building surveyor to carry out their own survey of the property and prepare a robust ‘Response’ to dilapidations claims.
Typically, this is the addition of their own columns and rebuttals of certain alleged breaches to the Excel document, along with alternative suggested remedies and lower costings.
At the same time, to maximise strength in the dilapidations negotiations, the tenant may include the defence of the ‘statutory cap’. This is an argument that damages suffered due to the impact of the breaches on the freehold value of the property will be lower than the cost of the remedial works.
This is called a ‘Diminution Valuation’. A Diminution Valuation is prepared by a chartered valuation surveyor. At Dilapsolutions, we uniquely provide both types of surveyors required by a tenant to secure an ideal outcome when going through dilapidations negotiations.
More often than not, the ‘statutory cap’ does serve to reduce the settlement figure to less than the lowest assessment of Cost of Works.
Note that in any event, if a landlord has not done, or does not intend to do any or all of the remedial works, paragraph 9.4 of the Dilapidations Protocol requires that the landlord should be providing its own Diminution Valuation in support of its claimed loss.
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Responding to dilapidations claims without due diligence can expose a tenant to the risk of significantly over settling. It is therefore vital that tenants obtain the best professional support so as to provide a strong rebuttal to the claim wherever appropriate and necessary.
At Dilapsolutions, we have only the most acclaimed personnel, providing comprehensive knowledge and expertise, coupled with tenacity, to ensure the best possible outcome, every time.
We are unique in our industry in that we offer both chartered building surveyors who provide an informed, and strong challenge to the landlord’s claimed repairs and remedial costings, as well as a chartered valuation surveyor to reduce the settlement figure by evidencing that the statutory cap should be engaged.
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