Dilapidations are the procedure and protocol that are in place both at the interim stage of a landlord and tenant’s lease, while also approaching the termination of the landlord’s and tenant’s lease.
Dilapidations will cover the various breaches that the tenant has caused in an aesthetic basis to the landlord’s property. Dilapidations exist as tenant approaches the exit from their lease.
With commercial leases setting out repairing obligations upon tenants, the landlords have reasonable expectation for their tenants to leave the property in a good state of repair and order.
This means that a tenant will have to yield up the property and pass it back to the landlord in a fit state of repair.
This is a distinct difference with residential property leases, whereby a tenant is not expected to decorate, undo alterations, or provide the property back to the landlord in a state whereby they can easily tenant and let it again.
Who pays for dilapidations costs?
When it comes to dilapidations costs, these are two-fold.
First and foremost, the costs associated with the professional fees in administering the Licence for Alterations are going to be in the form of a building surveyor’s fees to review and advise the landlord upon the dilapidations issues.
Secondly, the costs of rectifying and actually making good the dilapidations. Both of these are reasonably going to fall upon the shoulders of the tenant, therefore it is imperative that tenants prepare themselves for this type of exit cost in the run-up to the lease termination.
Here at Stokemont, tenants will often be surprised, sometimes even caught off-guard with the fact that they have to present the property back to the landlord in the condition that it was when they took it on at the start of the lease.
This is never more compounded than when a tenant has undertaken alterations that provide betterment to the property.
These alterations generally being the installations of air-conditioning units, modern partitions, new bathrooms, or kitchens, or service areas located within a property.
On face value, while these offer perfect benefit to the landlord, the landlord will reasonably be within their rights to ask the tenant to remove and reinstate the property back to its white box pre-lease state.
White box obviously being walls painted; carpets fully cleaned, replaced or new; all signage and shopfront advertising removed.
If you would like to discuss dilapidations surveys with our team of experienced building surveyors, please feel free to get in touch today.
