Why Are Dilapidations Claims So Complex and Costly?

Dilapidation claims are often contentious, mainly due to the differences between the landlord’s interpretation of disrepair to the space in question vs. the tenants. The two parties will, no doubt, also have differing viewpoints on the level of repair work that should subsequently be undertaken.

So who is right – the tenant or the landlord?

The case of Proudfoot V’s Hart [1890] 25 QBD 42, ruled that the standard of repair undertaken to the space/property, must be suitable for the occupation of a potential incoming tenant and have regard to the age, character and locality of the building.Therefore neither the tenant or landlord is right. Instead, the outcome of a dilapidations claim will be influenced by subjective factors including:

• The property market

• The landlord’s future intentions surrounding the space/property

• Both parties’ interpretation of the repair and reinstatement liability

Can you define a ‘suitable’ level of repair? Will this be costly?

A UK Full Repairing & Insuring (FRI) lease requires a tenant to maintain a level of ‘good’ repair throughout the space occupied and ensure the condition is of a’tenantable’ standard. No obvious defects should exist and all plant and machinery must be in working order.

End of lease term costs arising from dilapidation claims can therefore vary considerably, as the aforementioned elements may need to be addressed. Additional elements may also require attention including the replacement of carpets or fixtures and fittings.

What is the tenant usually liable for, in terms of repair work to the space occupied?

• Removal of all alterations and full
• reinstatement back to the original layout
• Redecoration in the final year of the lease term
• Necessary repairs undertaken throughout
• Replacement of fixtures, fittings or carpets where necessary
• Ensuring plant and machinery is in working order

Alex Charlesworth

Alex is head of Cushman & Wakefield Building Consultancy team and is responsible for all commercial building surveying services. He specialises in dilapidations and landlord and tenant related matters, including exit strategy. Alex is an authority on dilapidations and has written a number of articles and given presentations to both Clients and Peers. He is viewed by the industry to be a leading Dilapidations practitioner.