The Pre-Action Protocol for Claims for Damages in Relation to the Physical State of Commercial Property at Termination of a Tenancy (the Dilapidations Protocol) applies in relation to claims for damages for dilapidations against tenants at the termination of a tenancy. The Protocol deals with the conduct a court would normally expect the parties to follow before proceedings are commenced.
The Protocol encourages the parties to exchange documents regarding the claim as early as possible, thereby enabling the parties to avoid litigation if possible by settling the dispute and to ensure there is efficient management of proceedings where a claim cannot be settled and it proceeds to Court.
The Protocol requires the landlord to send the tenant a Schedule (Terminal Schedule of Dilapidations) which should set out what the landlord considers to be breaches of the Lease, the works required to be carried out to the property to remedy those breaches and the landlord’s expected costs in dealing with the breaches. The Protocol also requires the Schedule to separate the breaches into individual categories; these are usually Repairs, Reinstatement and Redecoration.
The landlord may send a Schedule before a tenancy is terminated, but if it does so, the landlord should confirm at the end of the tenancy that the situation remains the same as in the Schedule or amend the Schedule if appropriate within a reasonable time. It is normally accepted that a Schedule can be served on a tenant within 56 days of the termination of a tenancy.
The Schedule should be endorsed by the landlord or the landlord’s surveyor to confirm that the works in the Schedule are required to remedy the breaches of the Lease terms and that the landlord has taken full account of his intentions for the property, (which could be to redevelop or convert a building when it becomes vacant) and that the costings where appropriate are reasonable.
The Protocol also requires that a Quantified Demand is appended to the Schedule or sent with the Schedule to the tenant. This will set out all aspects of the dispute and the amount claimed from the tenant in respect of breaches in addition to any other items of loss for which damages are sought and whether VAT applies to those items.
If you are either a leaseholder who has received a claim for dilapidations and require advice on how to respond to a claim for dilapidations, or a landlord who has a property where the lease is due to terminate and require advice on the preparation of a Schedule of Dilapidations, please call one of our team on 020 8546 7211 who will be happy to advise further or contact us via email.