Our News
“Where is the Schedule of Condition?” |
| At lease-end this is a common heard cry from both tenants and their dilapidation specialists. At commencement of the lease, tenants have a clear intention to limit their repair exposure (often as a result of bitter experience) by recording the prior degradation of the premises in a Schedule of Condition. It sounds easy but there are many pitfalls and our experience is that less than 10% of such schedules provide any real reduction in the tenant’s full repairing liabilities. Common errors include; • Lease referring to a schedule but no schedule ever having been carried out or the document is lost or never appended to the lease. • Poor quality of reproduction of photographs that have been copied in black/white and are excessively dark. • Limited or no annotation of photographs and poor crossreferencing. • Repairing clause limited by way of the schedule but no reference within the decoration covenant, which remains fully applicable. • Defects recorded in the Schedule of Condition that should have more properly been dealt with as part of the leasehold acquisition “deal”, such as a leaking roof. Unlike a terminal schedule of dilapidations, there is no prescribed format, however at the lease-end the tenant will be best protected by a thorough written schedule which is supported by photographs but not dependent upon them. Such a schedule should be properly appended to the lease and engrossed with the lease package. The tenant should expect an expert Schedule of Condition to cost 70% of the price of a terminal schedule. This will be money well spent in terms of the savings it will provide. Anthony Lorenz | Dilapidations  |
1st December 2010, 11:32 AM |
Why are more Landlords opting to carry-out the works? |
 Our experience is that an increasing number of Landlords are opting to carry-out the repair works at lease-end in order to prove their losses. The reasons for this are many... • Tenants are better informed and unlikely to agree a financial settlement which would historically allow the Landlord to carry-out their preferred refurbishment scheme. • There has been a significant shift of power from Landlords to Tenants as a result of the Civil Procedure Rules, The Protocol and RICS Guidance Note. • If the Landlord does not carry out the work they may have to prove their loss by way of a Section 18 (1) valuation, which will provide a cap to the general repairs. Known as the ‘Statutory Cap’. • In an unfavourable market Landlords generally find it very difficult to let the premises in an unrepaired condition. • Carrying-out the work proves to the Court that the Landlord has tried to mitigate his loss and where a Tenant is waiting for the premises, maintains a claim for loss of rent/rates. Are there any risks for the Landlord with this strategy? • The main risk is supercession; as inevitably the Landlord will need to carryout certain improvements, but it’s better for the Landlord to come-clean with these and honesty here will support the overall recoverability. • The drafting and management of the repair works needs to be meticulously documented to clearly cross-relate the repairs to the terminal schedule and allow the Tenant’s representative adequate time to inspect concealed or unidentified defects before carrying out. • Tenant cannot meet cost of works or delays payment requiring legal proceedings to recover monies. This can be mitigated by checking the Tenant’s credit rating and ensuring that the Landlord has adequate funding to cover the cost of the building works. In summary, Landlords should take expert advice from a dilapidations specialist and give serious consideration to instructing the repair works as soon after lease-end as possible. This strategy will greatly counter the threat of both Statutory and Common Law caps limiting the claim. Furthermore an open and honest approach towards supercession will clearly demonstrate Landlord’s intentions and be favourably considered in event of Court proceedings being required. Anthony Lorenz | Dilapidations  |
24th November 2010, 11:28 AM |
New Client Update... |
| Dilaps UK are pround to announce that the following new clients have been recruited: • Johnson Cleaners • Telereal Trillium • AllSaints • LK Bennett • Timpson • Spudulike • King of Shaves • Amey • Bonhams Anthony Lorenz | Dilapidations  |
17th November 2010, 11:27 AM |
Further reduction in average lease length to Five years or under... |
| The BPF/IPD Annual lease review revealed that the proportion of leases of five years or less has increased to 72%, the highest level ever. Just 10% of leases are for 10 years or more. The retail sector showed the largest decline in lease length. The implications for dilapidations services is to increase the frequency of this specialist service and will promote repeat business. Anthony Lorenz | Dilapidations  |
10th November 2010, 11:22 AM |
Difficult market set to continue...improvements in London and a greater North/South divide! |
 The central London market is improving but mainly as a result of overseas cash from sovereign funds. The stabilisation of the property market in the rest of the UK will be affected by the public sector jobcuts (estimated at 600,000) and the reliance of regions such as, Wales, North East and North West on a growing public sector*. Whilst these economic factors are regrettable it does suggest that the increasing need for lease-end specialists to drive valuable settlements is to continue to grow in both the public and private sector for the foreseeable future. We are already seeing a dramatic increase in enquiries from both the public and private sector which we expect to continue over the next 2 to 3 years. *CEBR Anthony Lorenz | Dilapidations  |
5th November 2010, 10:59 AM |
12 Curzon Street London, W1 |
 DB Consultants lease expired and the Landlords claimed a substantial end of term Dilapidations schedule. After extensive negotiation this was reduced by 1/3rd – another happy client. Professional | Anthony Lorenz  |
29th March 2010, 10:27 AM |
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