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Dilapidations Case Studies

Dilapidations Case Studies

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Dilapidations Case Studies

 

North West
350 sqm, 4-storey, Grade II period office building
  • Legal Practice relocating to larger premises at lease expiry following long period of occupation.
  • Landlords costed claim served at expiry £68,000.
  • Instructed by tenant to mitigate claim and costs – claim finally agreed at £35,000, including costs and consequential losses, without tenant undertaking any works.
  • Tenants defence largely based on inflated landlords costings in schedule and diminution in value of landlords reversionary interest to determine ultimate loss

 

Wales
2,300 sqm, single storey, modern industrial building
  • Japanese manufacturing company relocating at lease expiry.
  • Landlords costed claim served at expiry £200,000. Schedule served 12 months prior to expiry of 5 year FRI lease.
  • Instructed by tenant to mitigate claim and costs – claim satisfied by undertaking agreed programme of works supervised by B A Commercial and landlords surveyors
  • Cost of works £25,000 plus £4,000 monetary payment for uncompleted work including fees but avoiding post termination consequential costs.

 

North West
450 sqm, 4-storey, period bank/ retail building in conservation area
  • Bank relocation at expiry of 25 year lease.
  • BA Commercial instructed by corporate landlords to submit claim 18 months prior to lease termination.
  • Schedule of Dilapidations served mainly relating to extensive alterations to internal layout, including installation of security vault.
  • Claim settled by Tenant undertaking extensive remedial works, including removal of security vault. Additional financial settlement in lieu of remaining works.
  • Further negotiation with sub-tenant and supervision of work undertaken by sub-lessee to agreed standard.
  • Hand over at termination date with payment of financial settlement enabling landlord to undertake external work programme and arrange early re-letting to new corporate lessee.

 

Neston, Wirral
156 sq metre two-storey high street retail premises
  • Large charitable organisation relocating locally to smaller premises at lease expiry served with a dilapidations claim of £48,000 by landlord.
  • BA Commercial instructed by tenant to defend/mitigate claim.
  • Tenants lease repairing obligations were benchmarked by a schedule of condition the start of the tenancy – the majority of the lengthy negotiations with the landlord’s surveyors revolved around the adequacy and implications of the schedule of condition and photographic evidence.
  • Claim ultimately agreed and settled on behalf of tenants at £12,000 including consequential costs and fees.
  • Schedule of condition was an important and material factor in minimising tenants exposure to cost.

 

Northwich, Cheshire
Two storey period high street premises
  • National pharmacy chain relocating after 25 year period of occupation.
  • BA Commercial instructed by local authority landlord to submit dilapidations claim at £32,000.
  • Tenants surveyor’s counter offer at £15,000 based largely on a challenge to the landlord’s intentions for the future of the property in accordance with Section 18 principles of the Landlord and Tenant Act 1927.
  • BA Commercial successfully concluded the claim in behalf of the landlord at £31,000.
  • Landlord’s intentions were important in proving the amount of the claim.

 

Chester, Cheshire
Two-storey city centre office premises
  • Office user vacating after period in occupation as tenant for 25 years.
  • BA Commercial acting for landlord prepared and submitted dilapidations claim.
  • Lease intended to limit tenants repairing liability but no formal schedule of condition was ever prepared and attached to the lease.
  • Tenant’s defence consequently weakened but difficulty for both landlord and tenant to establish precise repairing obligation and liability resulting in compromise negotiated settlement.
  • Importance of a full and detailed schedule of condition highlighted.

 

Bromborough, Wirral
148 sq metre 2 storey high Street retail premises
  • Long established retail tenant relocating after over 40 years in occupation served with terminal dilapidations claim by landlord of just under £100,000.
  • BA Commercial instructed by tenant to defend and mitigate claim prior to expiry of tenancy.
  • BA Commercial negotiated reduced content of claim with landlord’s surveyors resulting in an agreed schedule of works which were commissioned and undertaken by the tenant prior to the lease expiry at a significantly reduced cost (less than £20,000).
  • Importance of tenant engaging with landlord prior to the end of the tenancy highlighted and ability of tenant to control/implement works saved significant expenditure.

 

Ellesmere Port, Wirral
50 sq metre first floor office suite in town centre
  • Landlord instructed BAC to prepare a terminal schedule of dilapidations of a small.
  • Self-contained office suite; landlord’s claim £6000 including consequential costs and fees.
  • Tenant accepted liability for approximately £3000.
  • Parties could not agree to compromise and claim ended in county court with judgement against tenant for £16,000 (mainly legal costs).
  • Importance of avoiding cost of litigation highlighted – ADR (alternative dispute resolution) process likely to have been a better method of resolving claim.

 

Denbigh, North Wales
54 sq metre 3 storey retail unit with commercial upper floors converted from former residential accommodation in Grade 2 listed period building
  • Long established office user closing one of many national branch offices at end of lease.
  • Landlord instructed BA Commercial to prepare a terminal dilapidations claim amounting to £85,000 a large proportion of which related to reinstatement of the upper floors back into residential accommodation (and associated costs of compliance with statutory requirements).
  • Claim settled at £52,500 on commercial basis.
  • Importance of the “reinstatement and yield up” provisions in the lease were more relevant to the level of the claim than routine repair works, largely due to the high cost of statutory compliance.