As the landlord of a commercial property, you must ensure that your tenant is legally bound to pay for any damage they do to the property during their tenancy. Any work required to make the property whole—which the tenant is legally bound to pay for—constitutes dilapidations.
What’s a Dilapidation Survey?
Prior to entering into a new lease, it’s prudent for the potential tenant to commission a Schedule of Condition from an RICS Chartered Surveyor. This document lays out the current condition of the property, essentially providing a snapshot of its state at the beginning of the tenancy. If the lease is allowed to run its natural course, and the tenant is not in the process of vacating the property in an undue manner, then the leaseholder can expect to receive the same property (subject to reasonable wear and tear) in the same condition as it was received.
The Benefits of Dilapidations Surveys for Landlords
For landlords, there are several good reasons to obtain a dilapidations survey.
Tenant Responsibility: a tenant has rightfully fulfilled all aspects of a lease. Clauses in a lease can pertain to financially significant situations which the tenant would like to deal with.
Loss Limiting: if a tenant fails to comply with a clause, and the landlord is not aware of the failure while it is happening, then at the end of a tenancy the landlord could find themselves incurring damages and costs.
Understanding the property's condition before renting it to someone else is crucial, otherwise they could dispute any damage claims you might make. Your new tenant moves in and may claim that the property was always substandard.
The Advantages of a Dilapidations Survey for a Tenant
For tenants, a dilapidations survey has several advantages:
Saves Money: first, it helps save money. A landlord can claim not just for repair work but also for financial costs associated with the works. So, when a surveyor for the tenant can show that the figure claimed by the landlord is inflated, it helps the tenant save money; the amount saved can be quite substantial, depending on the level of excess costs being claimed by the landlord.
Control the Situation: second, the tenant can use a dilapidation survey to control the situation. Once the survey is done, the tenant knows what kind of work needs to be carried out and can either do the work themselves or hire someone else.
Avoiding Disputes: a good landlord-tenant relationship is best secured when both parties know and understand their rights and responsibilities under law. If the relationship fails, a surveyor can help you and your landlord reach an understanding. Going to court is always a last resort. When possible, we help our clients and their landlords come to a mutually agreeable solution with minimum conflict and expense.
What happens in a Dilapidation Claim?
While it is common for landlords to commission dilapidation surveys, they can also be useful for tenants. A surveyor evaluates the condition of each room and several key elements, such as ceilings, walls, floors, windows, doors, electrics, heating, and so on.
The landlord and tenant both benefit from these surveys, as they serve to establish a clear "before" condition of the property at the start of the lease. This way, at the end of the lease, the landlord can be assured that the tenant has complied with the lease agreement (i.e. that the tenant must maintain the property). If the landlord has good reason to suspect that the tenant has not kept up with the lease terms, they can use these surveys and their findings as evidence.
When landlords issue a Schedule of Dilapidations to a tenant, they are supposed to do it just for the principle of maintaining their premises and not with the aim of making a profit. It is a purely compensatory document. Any profit-seeking on the part of the landlord in this regard is forbidden.
So, if you are a landlord, what are you allowed to claim in the event of dilapidations? Essentially, all things necessary to put the property back into its original condition in accordance with the property’s value for potential future tenants.
The landlord must transparent about their intentions, because if you aren't and the tenant finds out, they can rightfully recoup what they have lost.
If you are a landlord needing to ascertain your tenant's dilapidation responsibilities, or if you are a tenant who feels you have issued with a bad Schedule of Dilapidations, we can assist you. We will get your surveyor to advise. Call us today.
Is a Dilapidation Survey necessary for me?
We can assist you in determining whether a dilapidations survey is necessary and what steps you should take next. Our panel of expert surveyors specialises in dilapidation matters. They are ready to help, and you can count on them to be independent, impartial, and good at what they do. They have helped both landlords and tenants come to amicable agreements and avoid the courtroom. Please get in touch with us, and we will put you in contact with your surveyor.