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Dilapidations are a critical aspect of property management for both residential and commercial landlords.
In essence, dilapidations refer to the state of disrepair or neglect a tenant leaves a property in, beyond the expected condition outlined in the lease agreement. In this article, we will explore this in detail, from understanding schedules to the role of a dilapidations surveyor.
What is a Schedule of Dilapidations?
There are 3 different types of schedule of dilapidations. Each of these types of schedule plays a distinct role in managing dilapidations issues throughout the lease period and at lease termination. The choice of which schedule to use depends on the circumstances and the desire to resolve matters cooperatively or through formal legal channels.
Pre Action Protocol
The Pre-Action Protocol for Dilapidations is a formal procedure designed to encourage communication and resolve issues between landlords and tenants without resorting to litigation. Before pursuing a claim, landlords will follow these key steps:
Initial Letter: The process usually starts with an initial letter from the landlord to the tenant, outlining their concerns about the property’s condition.
Tenant’s Response: The tenant is given a reasonable timeframe to respond, during which they can acknowledge the issues, propose repairs, or dispute the claims.
Negotiation: Both parties are encouraged to negotiate and reach an agreement. This can involve discussions about repairs, costs, and timelines for addressing the issues.
Alternative Dispute Resolution (ADR): If negotiations fail, ADR methods like mediation or expert determination may be used to facilitate a resolution.
An interim schedule of dilapidations is prepared during the lease term, typically when the landlord becomes aware of breaches of the lease related to maintenance. It serves several purposes:
Early Identification: It identifies issues early, allowing for corrective action during the lease term.
Cost Estimation: The schedule estimates the cost of repairs or remediation needed to address the breaches, providing a clear picture for both parties.
Facilitates Communication: Sharing the interim schedule can encourage communication between landlord and tenant, fostering cooperation to address issues promptly.
The terminal schedule of dilapidations is prepared at the end of the lease, usually during the leasehold’s last three years or upon lease expiration. This is a critical document that outlines:
All Breaches: It comprehensively lists all breaches of the lease agreement related to property maintenance and repair.
Cost Assessment: The schedule provides a detailed estimate of the costs required to remedy each breach, including labour, materials, and any associated professional fees.
Basis for Dilapidations Claim: The terminal schedule forms the basis for formal claims that the landlord can pursue against the tenant for reimbursement.
Legal Relevance: This document is legally significant and can be used as evidence in court if disputes arise.
Examples of Dilapidations Claims
- Interior Repairs: This may include fixing damaged walls, ceilings, or floors caused by tenant neglect.
- Electrical and Plumbing: Reinstating or repairing electrical and plumbing systems to their original condition.
- Decoration: Restoring the property’s decor to match the state at the start of the lease.
- Exterior Maintenance: Addressing issues like damaged roofs, gutters, or walls, which fall under the tenant’s responsibility.
What’s Included in a Dilapidations Survey & Report?
A dilapidations survey is a crucial step in assessing the property’s condition; the report typically includes:
- Detailed Inspection: A comprehensive examination of the property’s interior and exterior to identify breaches of the lease agreement.
- Photographic Evidence: Visual documentation of the property’s current state.
- Cost Estimates: A breakdown of the anticipated costs required to remedy the dilapidations.
- Legal Requirements: Ensuring that the claim adheres to legal guidelines.
Dilapidations Deposit: How Does It Work?
A dilapidations deposit is a sum held by the landlord during the lease to cover potential damage and act as security against any breaches. The deposit should be clearly outlined in the lease agreement, and any deductions must be supported by evidence. After the lease ends, any necessary repairs or maintenance can be funded from the deposit. Any remainder is returned to the tenant.
Do I Need a Specialist Dilapidations Surveyor?
Hiring a specialist dilapidations surveyor offers several advantages:
- Expertise: Dilapidations surveyors specialise in assessing property conditions and legal compliance.
- Unbiased Assessment: They provide an impartial evaluation of the property’s condition, which can be essential for dispute resolution.
- Negotiation Skills: Surveyors can negotiate with tenants on your behalf and, if needed, represent you in court.
At BPS, we understand the urgency of addressing dilapidations to prepare your property for the next tenant. Our team is efficient, competent, and committed to delivering clear and straightforward information with every property service.
Book a free consultation with us today or call us directly on 02083695640.