What is a schedule of dilapidation?
If you are a landlord of a commercial building and your tenants are responsible for the upkeep of that building but they have failed to maintain it satisfactorily or they have altered the property, it is advisable to undertake a schedule of dilapidation.
The schedule will list all the breaches of covenant and outline what works need to be done to rectify the breach. Sometimes costs of these repairs will be included. Often this is done towards the end of the lease.
Who undertakes a schedule of dilapidation?
This is sometimes completed by the landlord but most of the time by a chartered building surveyor.
If you are a tenant …
If you are a tenant, make sure you read and understand the tenancy contract thoroughly before you sign it. A chartered building surveyor will be able to give you advice about your future dilapidations liability. If you plan to make changes / alterations to the building, it is advisable to get a Licence for Alterations which is between you and the landlord and outlines what your responsibilities are.
Dilapidations disputes can end up in Court. Sometimes it is possible to settle the matter before it gets to court by making the landlord an offer. So the sooner you seek advice from your chartered building surveyor the better.
If there are any outstanding building works that you should have carried out during the term of the lease or you have not carried out your obligations under the Licence for Alterations, then you can expect a Schedule of Dilapidations from your landlord either shortly before or just after your lease expires. You will need to reply to this within 56 days. If you do not receive one and you think you have not met the requirements, it is advisable to get advice from a chartered building surveyor who can give you an idea of cost implications.
If you are a landlord …
If your tenant has made alterations to your building you may need to serve Notices on them to encourage them to put the building back the way it was before the end of the lease.
You must issue the tenant with your schedule of dilapidations, which can include costs of repair, within 56 days of the end of the lease. If you issued the schedule before the end of the lease, you must issue another updated one at the end of the lease. You can do this yourself or appoint a chartered building surveyor to do this on your behalf.
If at all possible, you will want to avoid Court proceedings and just as for tenants, it is important to appoint a chartered building surveyor as soon as you can. The tenant in question must respond to your schedule of dilapidation within 56 days of receipt. This response will give you an idea of what aspects are disputed.
Often the surveyors representing both tenant and landlord will meet and agree a settlement before the dispute ends up in Court.
Appointing a charted building surveyor
Anyone calling themselves a chartered building surveyor must be accredited by the Royal Institute for Chartered Surveyors (RICS), an independent body that regulates surveyors in the UK. Chartered surveyors will have MRICS or FRICS after their name. It is advisable to check your chosen supplier has the necessary qualifications, experience and insurance to meet your requirements.
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