Dilapidation Claims

Types of dilapidations claim

There are two different types of dilapidation claims:

Interim

These are claims that the landlord makes during the lease's lifetime requiring the tenant to keep the property in repair and the tenants on track regarding their obligations under the lease. These claims usually involve informing the tenant of damage or neglect observed and requesting that they repair and maintain the property's condition, within a defined time period. A landlord might serve a Repairs Notice (also known as a Jervis v Harris notice) on its tenant, which lists the disrepair and what is needed to remedy it, and which allows the tenant say 2 or 3 months to complete the work. Depending on the wording in the lease, the landlord may then have the right to enter the property, carry out the work and recover the costs from the tenant as a debt, if the tenant fails to complete the work or do it to the landlord’s satisfaction.

Terminal

Also known as final dilapidation claims, these happen once the lease has ended and the tenant has left the property. In these cases, the landlord has assessed the property's condition and knows what repairs and works need to be completed.

They will also know the financial impact of the repairs and any other fees, such as surveyors, lawyers, and loss of rental income while any repairs take place.

These claims, initiated by the landlord against the tenant, allow the landlord to recover the costs to repair the damage or neglect.

Who can make a dilapidations claim?

Dilapidation claims are always started by the landlord of the property.

Schedule of dilapidations

A schedule of dilapidations is needed to claim against a tenant. Working with qualified surveyors, our property dispute lawyers can help create a detailed schedule that should itemise everything that needs to be repaired under the terms signed in the lease. Schedules of dilapidation often include documents such as the lease, photographs of the property, letting agents' brochures, fit-out specifications, schedules of condition and deeds of variation.

The schedule with differ depending on whether it is an interim or terminal dilapidations claim.

For interim claims issued during the lease's term, the schedule outlines the breaches observed and the repair obligations under the lease, and what works the tenant needs to do to comply.

A terminal schedule is issued towards or after the end of the lease.

Once issued, the tenant can respond to the schedule before further legal action is taken.

Dilapidations claim process

Once a landlord has issued a costed schedule of dilapidations and a quantified demand (a document outlining further details of the alleged breaches), a tenant has 56 days to respond, stating whether they agree or disagree with the breaches and the needed repairs, and the costs.

The landlord will then respond. Once the response is received, it is advised that the landlord and tenant meet on a 'without prejudice' basis with each other and their professional advisers (usually lawyers and surveyors) to seek to resolve the claim or agree on certain elements of the claim. In these circumstances, alternative dispute resolution, such as mediation or early neutral evaluation, can be helpful.

If no settlement can be agreed upon, the landlord must prepare a more detailed qualification of losses as an account of actual or expected expenditure or formal diminution valuation.

If the tenant wishes to raise a defence, such as a Section 18 Landlord and Tenant Act 1927 (I will link to an article on this) defence, to reduce the value of the claim, they have 56 days from receiving the detailed quantification of losses.

Once this process has been adhered to, both the landlord and tenant engage in a cooling-off period, which is referred to as a "stocktake" in the dilapidations protocol. If, after this period, there is still no agreement, the landlord can submit their claim to the court.

Time limits for dilapidation claims

The lease agreement often outlines the time limits for making a dilapidation claim. The schedule is usually issued either before or shortly after the lease ends. The landlord should ideally provide the schedule of dilapidations within 56 days of the lease ending.