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DILAPIDATIONS DURING THE LEASE TERM

Tuesday, 21st January 2020 | by: David Whitehouse

Carter Fielding are regularly appointed by landlords to deal with dilapidations matters both during the lease term and at the end of a lease.  The approach for preparing a claim for dilapidations during a lease term is different to that at the end of a lease term, as the remedy to the landlord after the end of a lease is usually only damages, whereas during the lease term the remedies available to a landlord in pursuing a claim can include either damages, forfeiture, specific performance or entry to carry out the work.

Any damages the landlord would be entitled to would be restricted to any diminution in the value of the land or reversionary interest in the property.

It is a difficult and complex matter to justify forfeiture and it is normally necessary to take legal advice from a specialist if a client intends to pursue this route.  A court is more likely to order specific performance if the landlord has followed the correct procedures in issuing Notices (usually a Section 146 Notice under the Law of Property Act 1925) detailing the breaches of the tenant’s covenants.

A court will order Specific Performance (the performance of a contractual obligation such as to ‘Repair ‘) in exceptional circumstances particularly where the work is necessary as a matter of urgency to prevent serious deterioration and where the landlord has no alternative.

Leases often contain a clause giving the landlord the right to enter a property to undertake works without the consent of the tenant where the tenant is in default of their repairing obligations.  Such steps are normally taken as a last resort and again legal advice from an experienced solicitor is often recommended to a client if this route is anticipated.  The landlord’s costs are often recoverable as a debt from the tenant should this procedure be followed.

Carter Fielding have acted for a number of landlord clients over the years in preparing Interim Schedules of Dilapidations where tenants have failed to comply with their repairing covenants and have let the property fall into disrepair.  In one case, we were appointed for a landlord to inspect a large commercial shop unit with upper parts on there levels above on a busy high street in North West London.

Our inspection found evidence of water ingress into walls at the rear of the property because of defects to external rainwater goods, defective pointing and disrepair to window frames and sills, in addition to damage to roof coverings and particularly linings to concealed gutters at roof level.

Carter Fielding prepared a detailed Interim Schedule of Dilapidations listing each individual item of disrepair with photographic evidence which the landlord used to serve on the tenant with a Section 146 Notice prepared by the tenant’s solicitor.

Carter Fielding was subsequently involved in negotiations with the tenant’s in-house property management team to agree a programme of repairs which were then undertaken to the property over a period of six to twelve months to deal with the problems which had been identified and to ensure no further deterioration of the external fabric of the property during the lease term.

If you require advice on dilapidations matters, you are welcome to call us on 020 8546 7211 or contact us by email.