Recession causes dilapidations instructions to rise

Whilst dilapidations have always been a core area of work carried out by Alder King’s building consultancy team, the current economic situation has resulted in a significant increase in the numbers of dilapidations instructions from both tenants and landlords faced with lease expiries or concerns over the condition of their buildings.

Alder King’s building consultancy team have current instructions across the UK for a large number of individual and corporate clients, with claims ranging from £10,000 to more than £2.5m on all types of buildings. The team also have experience in dilapidations matters in Scotland where tenants do not have the benefit of the same legal protection as the rest of Great Britain.

More than ever in the current economic environment, with lettings more difficult to achieve, tenants are facing significant claims from landlords primarily at lease expiry who are seeking to minimise the impact of a tenant’s departure and maximise money paid in damages to repair their property. Similarly landlords have concerns that buildings are returned at lease expiry in compliance with the lease requirements, or that sufficient money is paid for damages to cover the works required.

As a result the levels of landlords’ claims reviewed by Alder King are tending to become more aggressive in nature and similarly there is increased resistance and greater defence made by tenants against the claims in order to reduce costs to a sensible level.

In acting on dilapidations matters Alder King’s building consultancy team always endeavour to provide accurate and realistic advice to both landlords and tenants on the potential dilapidations liabilities, taking into account the lease provisions and relevant documents to ensure that claims are as fair and reasonable as possible. They also advise on a range of strategies to draw dilapidations matters to a swift and cost effective solution and would recommend that early advice is sought on any dilapidation related issues, (including Repairs Notices and Interim Schedules which are becoming increasingly common), to ensure all potential options to resolve a potential claim are considered.

Alder King’s experienced teams have achieved a number of significant successes on behalf of tenants where claims have been significantly reduced either by an early assessment of dilapidations liabilities and advice on managing the claim via negotiating direct, or through implementing the works prior to lease expiry to a standard that meets the landlord’s expectations. Similarly successes have been gained for landlords where negotiations have been carried out clearly identifying and highlighting the obligations of the lease and ensuring an appropriate settlement is achieved covering all aspects of liabilities in a reasonable manner and timescales.

In addition, due to recent changes in the lettings market, the statutory cap on dilapidation claims increasingly needs to be considered and working with Alder King’s valuation team we can offer advice to both landlords and tenants as to the likely impact this may have on any claim.

Contact: Paul Montague, partner at Alder King on 0117 317 1000 or visit www.alderking.com for further information.
 

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