Dilapidations for Solicitors
Dilapidations for Solicitors
Solicitors are in a pivotal position to ensure that all parties to a commercial lease enter into their respective contractual obligations with a full knowledge and understanding of their respective legal commitments and liabilities, particularly in relation to the cost of dealing with dilapidations problems.
Without comprehensive advice at the beginning of a tenancy there is a risk that dilapidations issues are ignored and left to be dealt with at the termination of the lease and all too often this results in protracted and costly dilapidations disputes that serve neither the interests of the landlord nor the tenant.
With the benefit of many years experience in dealing with dilapidations claims it is clear that many disputes, and often unnecessary stress and cost, can readily be avoided by both landlords and tenants receiving full and proper advice (particularly from solicitors as well as surveyors) at the start of a tenancy to minimise the risk of controversy and dispute during, or more likely at the end of, the tenancy.
It is a common misconception by prospective tenants to not fully realise the implications of lease repairing covenants, which can vary significantly depending upon the lease drafting, and the extent to which these covenants determine how the property or premises should be handed back to the landlord at the end of the lease term. It is often the case, for example, that a tenant will assume that it has no obligation to rectify items of disrepair which exist when a tenant takes occupation but this will not be the case if the lease requires the tenant to hand back the building in good condition i.e. regardless of the condition at the outset. Solicitors will consequently provide detailed advice as to the implications of the lease terms and often recommend that tenants obtain surveyors advice to carefully check potential repair and other issues before the lease is signed.
Solicitors may also advise that a Schedule of Condition is incorporated into a lease at the start of a tenancy which will record the condition of the property and effectively provide the tenant with a degree of protection against a dilapidations claim at a later date. Such schedules will not necessarily be a complete guarantee against dilapidations liability but are likely to be highly cost-effective if prepared by competent personnel who understand the dilapidations process and will often be very detailed, with comprehensive photographic evidence, for maximum effect.
Solicitors will also provide advice to tenants as to their obligations under a lease to comply with other covenants, such as periodic redecoration and statutory obligations (ensuring compliance with electricity, gas, fire safety and asbestos regulations etc) and recommend appropriate survey advice is obtained to minimise the risk of such legal matters adding to dilapidations liabilities during, or at the end of, the lease term.
Another area of concern, where legal advice can be crucial in relation to dilapidations matters, can arise at the time of exercising a Break clause to terminate a tenancy before the end of the contractual term as failure by a tenant to comply with repairing and other covenants can, in some cases, invalidate the break option with potentially expensive consequences.
Dilapidations claims can be a fraught and expensive process which, in many cases, could well have been mitigated, or avoided altogether, by obtaining good professional advice, both from solicitors and surveyors, at an early stage.
The team at B A Commercial will be happy to provide preliminary advice and appraisals to both landlords, tenants and legal advisors.