Top 5 tenant dilapidations mistakes and how to avoid them
Commercial property leases can be complex and that can result in commercial tenants facing expensive surprises at the end of their lease when they are issued with a bill for dilpaidations. Understanding common dilapidation issues and how to avoid them is crucial for tenants looking to save money, time, and stress when they move out of a property.
Here are the five most common mistakes commercial tenants make in regars to dilpaidations and how you can avoid them.
Failing to understand lease reinstatement obligations
The lease should clearly set out the tenants obligations in terms of what they are responsible for and the condition in which they should leave the property at the end of the tenancy.
A broadly worded lease can leave it open for landlords to claim that the tenant should be responsible for renewal and not just repairing elements of the property and lead to a dilapidations dispute between the landlord and the tenant.
It is always critical to careful review the lease before signing and make sure that every clause is clearly defined so both sides agree on what is expected.
Failing to obtain a Schedule of Condition
One of the simplest yet most effective defences to a dilapidations claim is to document the property’s condition before you move in. Ideally a tenant should instruct a RICS accredited surveyor to appraise the condition of the property and its decoration and prepare a Schedule of Condition with annotated photographs and videos to highlight any potential issues.
This document helps to exclude any liability for pre-existing problems and defects and sets a baseline for any dilapidatiosn disputes between the landlord and tenant.
Failing to adequately maintain the property
As with any property, commercial buildings require ongoin routine maintenance. Not only is this maintenance good practice and make the building a better place to work or store goods, but it can avoid costly dilapidations bills at the end of a tenancy.
Property maintenance issues such as leaks are much cheaper to fix if dealt with quickly and not left until the issue has become an emergency or caused other cascading problems.
Failing to respond to a Schedule of Dilapidations
A Schedule of Dilapidations sets out what the landlord considers to be the tenant’s breaches of the lease agreement in terms of the condition of the property and lays out the works required to rememdy those breaches along with any relevant costings.
Tenants sometimes delay responding to a Schedule of Dilapidations or ignore it completely and this can be a costly mistake. Such delays can weaken the tenant’s negotiating power in dilapidation settlement negotiations and result in unneccessary litigation.
Ignoring the Pre-Action Protocol
The “Pre-Action Protocol For Claims For Damages In Relation To The Physical State Of Commercial Property At Termination Of A Tenancy”, also known as the dilapidations protocol, sets out a series of steps that landlords and tenants must make before commencing legal action for dilapidations.
The aim of this protocol is to avoid litigation, which can be costly and slow for both parties, and tenants should familiarise themselves with it when they have a lease of a property so that they do not inadvertently fail to comply.
Failing to comply with the dilapidations protocol could mean that the parties end up in court and and the tenant facing sanction.
Choosing the wrong dilapidations contractor
No matter the dilapidations works required, finding the right dilapidations contractor is key to saving money on the remedial works. If tenants are not pro-active in finding a contractor and starting the works, a landlord can choose their own contractor which may not be the most cost effective option.
If your lease is coming to an end and you require some remedial work completed to return the property to its original condition then call Workspace Dilapidations today on 07498 727 457 or contact us online for a quote.