Dilapidations

Question 1

What is the difference between an interim, terminal and final SoD?

Answer 1

• Interim is served during the term
• Terminal schedule is served in the last six months
• Final schedule is served after expiry

Question 2

What is the surveyor’s endorsement?

Answer 2

A requirement of the Pre-action Protocol to confirm in that the option of the surveyor:
- All the works which are set out are reasonably required in order to put the premise in a condition as per lease obligations
- Full account has been taken of the landlord intentions
- Costs are reasonable.
The surveyor should check with the landlord at each time (near end of lease and post expiry) before making endorsement.

Question 3

What are consequential losses?

Answer 3

• Loss of rent income, business rates, insurance premiums, service, income and cost of finance.
• Landlord cannot recover more than its loss.

Question 4

What is the dilapidations protocol?

Answer 4

• It relates to claims for damages for dilapidations against tenants at the termination of a tenancy
• It applies to commercial property situated in England and Wales

Question 5

What are the objectives of the dilapidations protocol?

Answer 5

• To encourage the exchange of early and full information about the dispute
• To enable the parties to avoid litigation by agreeing a settlement of the dispute before proceedings are commenced
• To support the efficient management of proceedings where litigation cannot be avoided

Question 6

What are the stages of the dilapidations protocol?

Answer 6

• Landlord SoD to Tenant: The schedule of dilapidations should be sent 56 days after termination of the tenancy, but can be sent prior to lease end.
• Landlord QD to Tenant: The landlord should issue a quantified demand within 56 days after termination of the tenancy.
• Tenant SS Response: The tenant should issue a tenant’s response normally within 56 days after the landlord sending the quantified demand.
• Negotiations: Negotiations then take place with a meeting normally occurring between the landlord and tenant or their respective surveyors within 28 days after the tenant issues their response.
• Quantification of Loss: During negotiations, the landlord should quantify its loss by providing a formal diminution of value or an account of actual expenditure.
• Stocktake: A review of both side respective positions before formalising court proceedings. Both parties should look to narrow issues to their final point.

Question 7

What is a quantified demand?

Answer 7

A quantified demand presents an account of the likely loss incurred by the landlord or if the works has been undertaken, the actual loss.

Question 8

When should a quantified demand be sent and what should be included?

Answer 8

• 56 days from lease expiry
• Summary of losses
• Party and lease details
• Supporting documents
• Statement of party willing to attend meetings
• Reference to schedule of dilapidations

Question 9

What is the Property Litigation Association?

Answer 9

A body of lawyers specialising in property litigation