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Appoint your own Chartered surveyor before lease negotiation to assess your dilapidation liability. Don't just rely on your solicitor, they are not property specialists!
Use a schedule of condition prepared by a Chartered Surveyor, to protect you against existing damage. Ensure your solicitor uses the schedule of condition to limit decoration and re-instatement
Ensure all lease covenants are protected through the schedule of condition.
Check the schedule of condition with your own Chartered Surveyor to ensure accuracy.
These days, leases are much shorter in duration than historically was the case. Typical lease lengths are around five years long, as opposed to the 25-year offerings of yesteryear. New tenants entering into properties need to realise that if the lease provides for them to ‘keep’, ‘put and keep’ or ‘maintain’…in good and substantial repair and condition, then regardless of the state of the premises at lease commencement, there is an inherent obligation for the Tenant to repair the premises before the end of the term.
In order to do so, if the building, suite or premises is in a poor condition it may be necessary to undertake significant works. On short leases these works can add significantly to occupational costs as the duration over which to spread the costs is much shorter; and the tenant has little enjoyment of the benefits!
Schedules of condition, drafted by a firm of Chartered Surveyors, can save a fortune in costs at the end of the term. At the end of the term the Landlord’s CharteredSurveyors prepare and serve their schedule of dilapidations.
A skilfully prepared schedule of condition, properly referenced in the lease, can avoid unnecessary dilapidations costs at lease end. Very often, the Landlord’s Chartered Surveyors do not even consider these schedules of condition documents, which means that in certain instances Landlords can be caught out by Tenants surveyors vaguely written schedules of condition. In addition, even where these schedules of condition are properly prepared and referenced against the repairing obligations in the lease, the solicitors do not use them to limit all of the other covenants, for example decoration or alterations!
Depending on demand for the premises, Tenants could be advised to ask the Landlord to undertake the existing ‘dilapidations’ works in advance of their occupation. Quite simply, before the lease is signed, the power in the lease negotiation rests with the Tenant. They should employ a suitable adept firm of Chartered Surveyors to assist in the lease negotiations, its not just about the rent!
Typically, a good firm of Chartered Surveyors, employed prior to the execution of the lease can save £1000’s in solicitors and property costs, by limiting scope of Tenants works, advising on risks to the dilapidations settlement sums and advising on rent free periods and concessions associated with pre-existing defects. Unfortunately, many prospective Tenants simply rely on their solicitors to advise them during the lease negotiations.
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