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Regulated by the RICS

1. Objective

To achieve a realistic settlement in the best interests of our client (be they landlord or tenant) as quickly as reasonably possible without undue expense and avoiding the costs and delays of the matter being referred to the Courts for determination.

2. Basis of Liability

  1. A lease will set out the standard of condition in which the tenant has agreed to maintain the property and in which it should be returned to the landlord at the end of the term.  (This may relate to a full repairing liability or merely an internal repairing liability.)
  2. This standard is usually referred to as “good” and/or “tenantable” condition - although in some cases this may be qualified by a Schedule of Condition document recording the condition at the start of the lease and requiring that the tenant maintains the property in no better condition than that recorded in that document.
  3. If the lease requires that the property be maintained in “good” condition but it is not in “good” condition when the lease is granted (and there is no Schedule of Condition)  the tenant could be required to put it into good condition by the end of the lease.

3. Claim

  1. The landlord will have the right to inspect the property during and at the end of the lease to confirm whether it is being/has been maintained in accordance with the requirements of the lease. 
  2. If, during the lease period, the property has not been maintained in accordance with these requirements the landlord can issue a schedule setting out the disrepair and requiring the tenant puts the property into a good condition.
  3.  If the tenant does not comply with these requirements within a specified time period the landlord will have the power to enter the property, carry out the works and charge the tenant the costs involved.
  4. At the end of the lease the landlord has the right to recover from the tenant a sum of money (damages) which reflects any reduction in the value of the property if the tenant has not fully complied with the provisions of the lease and it is in disrepair.  Although this sum is usually quantified as the cost of putting the property “in repair” together with loss of rent and other costs, this is not always the case.
  5. For example:
    1. If the landlord’s intention is to substantially renovate or/and refurbish the property the fact that it is in disrepair may not be relevant as the landlord’s works could in effect “undo” the works which the tenant should have carried out.
    2. If the landlord’s intention is to demolish and possibly redevelop the property - the fact that it is in disrepair is of no relevance.
      The situation must be judged on the basis of the circumstances and the landlord’s stated intention at the end of the lease.

4. Procedure

  1. The usual procedure at or near the end of the lease is for the landlord to provide a document setting out his monetary Claim for Damages against the tenant and a Schedule of Dilapidations which will include details of the disrepair and their costs and the reasons and basis on which the claim is made.
  2. The tenant will then consider the document and respond on the details of the Claim. 
  3. They (or their respective surveyors) will then discuss and agree the amount of the Claim.
  4. There is a procedure and timetable (the Protocol) set out by the Royal Institution of Chartered Surveyors (RICS) for these matters, which should be followed.

5. Determination

If the Claim cannot be agreed the matter may be referred to the Courts for settlement.

Please contact us on 01603 488023 (quoting 3. Rating. List 2010.  110503) if you are in need of advice or assistance on this topic