Dilapidations Surveyors Bristol
Our Bristol dilapidations team recently supported a charity with an anticipated schedule of dilapidations of their headquarters, which they were leasing from an investor.
What is a dilapidations survey?
A dilapidations survey is a detailed, in-depth inspection of a leased property. It will look at the condition of the property and the way it is being used, and any changes that have been made outside of what is permitted within the terms of the lease.
The information gathered in the survey can be used to prepare a schedule of dilapidations for the landlord, which sets out the costs of the repairs and alterations that would be needed to return the property to the state specified in the lease.
When we prepare a dilapidations schedule for a tenant mid-way through a lease, the information can tell them what works they will need to carry out at the end of their tenancy to fulfil their lease obligations. Alternatively, when we work with tenants at the end of the lease, the survey can be used to prepare a Scott schedule of dilapidations, which is used to dispute claims made by their landlord at the end of the lease.
A ‘dilapidation’ is a breach of a condition within a lease relating to the condition of a property, either during a rental or at the end of a lease term
Anticipated schedule of dilapidations for a tenant: a case study
In this case study, we prepared an anticipated schedule of dilapidations on behalf of a tenant. These surveys involve us preparing a dilapidations schedule as if we were the landlord, so that the tenants can understand their potential liabilities.
In this instance, the tenant was getting close to the end of their lease term, and wanted to understand the costs that would be incurred at the termination of their lease. This would allow them to make an informed decision regarding the cost of ending the lease, versus renewing it. The tenants also used this information to allow them to rectify the breaches themselves by making the necessary repairs before the lease came to an end. This helped them minimize the costs due to the landlord.
Brief: Carry out a schedule of dilapidations on behalf of the tenant, while they were still leasing the property. This would enable them anticipate the costs that they would be liable for at the end of the lease.
Property: Second floor of a multi-storey Victorian office building.
Instructed by: The tenant – a charity using the building as their headquarters.
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- Overall, we identified nearly 100 items requiring repair or reinstatement, most of which were minor, incurring costs of under £1000.
- The tenant had made some minor structural changes to the layout – installing partition walls and glazing in several areas of the property. These would need to be removed, and disturbed surfaces on the ceilings and walls repaired. Fire alarm and security systems would also need to be reconfigured: £10,000.
- As with most leased properties, the carpet and vinyl floor tiles had aged and stained in many areas. Replacement was estimated to cost £9600.
- Some ceiling tiles were lightly soiled and misaligned in areas. These needed to be cleaned and adjusted: £1500.
- We also noted minor movement and undulation underfoot, and so advised the tenant that they should budget for fixing down the ply boarding and levelling the flooring: £1000.
This information allowed our client to begin making repairs to the property.
By the time the landlord served a terminal schedule of dilapidations, the tenants had been able to carry out enough repairs to reduce the figure for repairs and reinstatements by over £10,000.
The next lease: getting a schedule of condition
A schedule of condition is always recommended at the start of lease. This gives a comprehensive record of the condition of the property before the tenant takes it on, and is then added to the lease to limit the tenant’s repairing obligations at lease end. In other words, it means that a tenant cannot be asked to repair anything that was already in disrepair at the start of the lease. For example, in the case study above, a schedule of condition could have limited the tenant’s liability for repairing the undulating floor, if this had been recorded as a defect in a schedule of condition.
Other types of Dilapidations Survey Services
Interim schedule of dilapidations
These are carried out by landlords during the term of a lease. They can be beneficial to landlords who are concerned that a tenant is not carrying out proper maintenance, and can also help tenants to budget for repairs, or to find the time to make the repairs themselves.
An interim dilapidations survey can also give some protection to landlords against tenants going bankrupt, because it allows for at least some repair and reinstatement works to be completed without waiting for lease end.
Interim dilapidations reports usually focus on the items and types of remedial work, rather than the costs, unless the landlord is pursuing damages.
Terminal schedule of dilapidations
Terminal dilapidations surveys are carried out on behalf of the landlord as the end of the lease approaches. These are very detailed, itemized lists of everything that needs to be fixed or reinstated by the end of a tenancy. At this point, the tenant can instruct a surveyor to defend against items in the landlord’s schedule, and help them negotiate a settlement figure.
Final schedule of dilapidations
These are similar to a terminal schedule of dilapidations, but are carried out after the lease has ended, if the required repairs have not been satisfactorily completed. As well as repair and reinstatement costs, a final schedule of dilapidations can also include the financial impact of lost rent if the repairs mean the landlord cannot re-let the property as soon as, or for as high a value, as they would otherwise have been able to.
This is prepared by a surveyor on the tenant’s behalf, and lists the landlords claims out item-by-item, alongside a response from the tenant. This is used as a basis for negotiations, with the aim of reaching a settlement agreeable to both parties.
Section 18 valuation
Section 18 is a written law that puts a cap on dilapidations damages. It gives tenants the right to instruct a valuation of the financial loss to a landlord on a leased property as a result of repairs not being made by the tenant. This loss is called the diminuation value. If the diminuation value is less than the cost to the landlord of doing the works, the landlord can only claim the diminuation value from the tenant.
In this way, a Section 18 valuation can save tenants money when they have a schedule of dilapidations served against them.