HCR Law Events

20 January 2020

I have received a schedule of dilapidations; what do I do now?

Schedule from your landlord

The type of schedule you have received and its timing will have a bearing upon the options available to you and the steps that you need to take. The most common time to receive a schedule from your landlord is just before or just after the lease termination date.

When was the schedule received?

If you have received a terminal schedule after the lease expired, we will be exploring a monetary settlement if liability is agreed or proven.

If you receive a terminal schedule before your lease has expired, it is likely that the landlord is trying to prompt you into undertaking the works before you vacate. However, be mindful that your liability doesn’t crystallize until the lease expires and so the landlord can revise and expand upon the contents of the schedule if they find additional disrepair.

 

Do you have questions about your dilapidation? Contact our Dispute Resolution team now.

 

An interim schedule served part way through the lease term is subject to additional hurdles that the landlord must satisfy if they want you to carry out the works immediately rather than at lease expiry.

Are you intending to undertake the works?

It is important to understand the scope of your liability before you decide how to proceed. Instructing a building surveyor and a solicitor early will help you assess this. There may be items that have been included that fall outside of the areas of the property that you occupy, or where there are legal arguments that can be raised to reduce the scale of the liability.

The scope of that obligation can vary vastly. If the lease includes a schedule of condition, the liability should be reduced. Sometimes this can be a smaller reduction than anticipated if the quality of the schedule is poor.

It is not unusual for a full repairing obligation to require you to return the property in a better standard of repair than existed when the lease started.

If you are proposing to undertake the works, you need to ensure that they are properly project-managed. Consider:

• whether staff can remain in situ whilst the works are undertaken
• if there is an order of works that would limit the impact upon business continuity
• if you have alternative premises available to move over before the expiry date
• any security or insurance implications of vacating early.

The importance of documenting a settlement

If you agree on a sum to pay to the landlord instead of undertaking the works, the terms of the settlement should be considered carefully. You do not want to inadvertently ‘settle’ any claim you may have to a rent or service charge overpayment by adopting a broad brush approach.

Value and next steps

Before you embark upon any decisions, you should consider proportionality. If the claim is nominal, then adding to your outlay by picking through the schedule with a fine tooth comb will only add to your cost liability. Whereas if the value is high, ensuring that you receive expert advice about the application of the pre-action protocol and the potential for a statutory cap to limit the claim can be vital.

 

For more information and advice, contact Natalie Minott at NMinott@hcrlaw.com or on 01223 581 441.

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About the Author
Natalie Minott, Partner

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