The Schedule of Dilapidations
The Schedule of Dilapidations is a detailed schedule (usually in Excel format) which clearly identifies all alleged breaches of the lease. It differentiates between repair, redecoration and reinstatement of alterations, and sets out proposed remedies along with costings.
This is ‘served’ by the landlord upon the tenant, usually by the landlord’s solicitor. The tenant’s chartered building surveyor will then comment alongside each alleged breach either in agreement, proposing an alternative remedy/cost, or rejecting altogether. This is the tenant’s ‘Response Document’.
As the Schedule of Dilapidations is usually served after the lease has expired, it is a claim for damages as the tenant is no longer able to enter the property and do the remedial works.
The Schedule of Dilapidations is usually accompanied by the formal ‘Quantified Demand’ which should set-out clearly its composition and substantiate the sums sought as damages in respect of the breaches detailed, as well as any other items of loss, claimed (e.g. loss of rent, Rates, interest, fees etc.).
It should also specify whether or not VAT applies (this may be erroneously sought in practice; we can advise accordingly).
Negotiations between building surveyors continue based on this evolving Excel document, commonly in more complex buildings utilising the services of specialist contractors to price e.g. M&E, or roof, repairs.
If prices cannot be agreed between chartered building surveyors, the landlord may seek to resolve this by engaging in a formal tender exercise, with prices commonly obtained from three contractors, often on an ‘open book’ basis with the tenant’s chartered building surveyor.
The necessary involvement of the chartered valuation surveyor can be sought at any time in this process, to identify items likely to be superseded (whether or not ‘admitted’ to) and/or which are unlikely to affect freehold value whether or not done (see the section on ‘Diminution in Value’).
True Measure of Loss
Regarding Diminuation in Value, the ‘Dilapidations Protocol’ states that any sum outlined in the Quantified Demand should be limited to any loss the landlord is likely to incur, which is not “necessarily” the same as the cost of fixing any breaches.
This is because the Quantified Demand should not cover any reparations or alterations that are likely to be “superseded”,or made irrelevant, by the landlord’s plans for the property.
The relevant figures will be calculated by two types of chartered surveyor, both of which we uniquely provide. The personnel that we have available have the expertise and qualifications to carry out all of the work with unparellelled skill, expertise and judgement,in order to make sure you receive the very best possible outcome.