Dilapidations are items of disrepair or defects caused by the tenant failing to maintain and repair the property in accordance with the lease, causing the landlord to suffer a financial loss. To avoid lengthy and costly disputes, it is important that the lease clearly details the responsibility the tenant has to maintain the property.
It is useful for both landlords and tenants that photographic evidence of the property is taken before the lease is agreed so both sides know where they stand on the condition of the property at the time the lease started.
As a landlord you shouldn’t wait until the lease has ended to check for disrepair, otherwise you won’t be able to forfeit the lease. If the property has not been maintained and repaired as agreed you can only claim damages, if the lease has ended.
What is the dilapidations process?
If the tenant fails to maintain and repair the property as agreed in the lease, a schedule of dilapidations (items of disrepair) should be drawn up by the landlord’s surveyor to record the alleged breaches and find appropriate solutions. After this is given to the tenant they will normally ask their own surveyor to review the schedule.
The tenant then has the option to carry out repair work or wait until the end of the lease and agree a financial settlement with the landlord for repairs to be carried out (this is the only option available to the tenant once the lease has expired).
What remedies are there for landlords when the tenant fails to maintain the property?
If during the lease, the tenant fails to maintain and repair the property, landlords have a number of options
- serve a notice of breach of covenant threatening termination of the lease if repairs aren’t made
- apply to the court for an order to force the tenant to carry out the necessary repairs and to pay damages and costs
- serve a notice on the tenant, if the lease allows it. If they fail to carry out repairs in time the landlord can organise it themselves and bill the tenant for the work.
What provisions can a tenant can make to prevent termination of their lease?
If the lease is for at least seven years and there are at least three years left to run on the lease, the tenant can serve a counter notice claiming the benefit of the Leasehold Property Repairs Act. This means the landlord cannot forfeit the lease without getting permission from the court. To defeat this, the landlord would have to show that the disrepair was damaging to the fabric of the building rather than just cosmetic.
Dilapidations on termination of the lease
It is in both the landlord’s and the tenant’s interest to act before the end of the lease to avoid dilapidations claims. From the tenant’s viewpoint, they should try to ensure that they have complied with the lease covenants, if necessary with the assistance or advice of a surveyor, and that they put right any breaches of the lease terms before the lease has ended.
From the landlord’s point of view, it would be helpful to inspect the property a few months prior to the end of the lease term. If the landlord finds disrepair, a schedule of dilapidations can be drawn up at that stage and this will give the tenant the opportunity of carrying out repairs before the end of the lease term.