Commercial Lease Dilapidation Claims Solicitors

Dilapidations in a commercial lease are damages or defects to a property, which a tenant is legally obliged to fix or sort out in accordance with their lease.

For the duration of a commercial lease, the Tenant will have several obligations, which they have agreed, relating to the state and the condition of the Premises. These will include the state and condition the property is to be in, upon handing the premises back to the landlord at the end of the tenancy. Dilapidations is the term used for the tenant’s breach of their obligations relating to the condition of the premises at the end of the lease.

Commercial property dilapidation claims can be complex and costly. It’s therefore important to seek legal advice early on to avoid any potential conflicts or issues further down the line.

What are dilapidations?

‘Dilapidations’ relate to a breach of the tenant’s obligations relating to the state of repair and condition of the property during, but more particularly at the end of the lease. A dilapidations dispute most commonly arises between a landlord and tenant at the end of a commercial tenancy when there is a disagreement as to the condition the premises should be and/or has been left in, upon the tenant vacating.

Relevant lease covenants in respect of a tenant’s liability for dilapidations will generally include decoration, statute compliance, a ‘yield up’ clause and an alterations clause in addition to their repairing covenant.

Tenants are generally responsible for maintaining or repairing the property and ensuring that it remains and is left in, the same ‘condition’ it was at the beginning of the lease. There may also be an obligation for the tenant to decorate the premises at certain intervals, and reinstate alterations made to the premises, before vacating the premises.

To protect the landlord’s financial interests, a commercial lease will normally specify what happens at the end of a lease should there be dilapidations.

If a landlord has suffered financial loss as the result of damages or disrepair, they may be eligible to make a dilapidations claim.

Avoiding a dilapidation dispute

The most effective way to avoid dilapidation disputes is to ensure the commercial lease is comprehensive and watertight. It should clearly set out both the tenant and landlord’s obligations and what would happen if these obligations were not met.

Both the landlord and tenant should read the commercial lease carefully before signing. It is also a good idea for landlords to seek specialist legal advice when drafting a lease to ensure it is fair and legally sound.

The tenant should inspect the property before signing anything. Tenants can also request a ‘Schedule of Condition’ from a property surveyor which contains a description and photographic proof of the property’s state of repair before the lease commences. This document is particularly useful where the property is not in a good state of repair, and can be important evidence should a dispute arise.

If a tenant does not meet the obligations set out in the commercial lease, e.g. they fail to carry out the repairs or refuse to pay for any damage to be put right, the landlord may be eligible to take legal action.

How are dilapidation disputes resolved?

Whether you are a landlord or a tenant,  if a dispute arises over dilapidation, you should seek legal advice as soon as possible.

Only landlords can start a dilapidation claim, however, tenants should speak to a solicitor before responding to a claim to ensure they follow the process correctly.

There are various steps involved in the claims process, including issuing a Schedule of Dilapidations (provided by a qualified surveyor and which sets out how the clauses have been breached and the estimated costs for repairs) which our commercial property dispute solicitors will advise you on.

In most cases, our commercial property disputes solicitors aim to resolve dilapidation disputes through mediation. This is where both parties meet to discuss the issue/s, normally in the presence of a trained mediator and/or solicitor and try to come to an agreement.

Dilapidation disputes are not always resolved through mediation, however, and will sometimes end up in court. Having an expert solicitor on your side to defend any court proceedings is essential.

Claiming forfeiture

If a tenant breaches the lease’s terms, such as repair obligations, forfeiture enables a landlord to re-enter their property and terminate the lease.

Landlords can claim forfeiture themselves (through entering the property and changing the locks) or through court proceedings. Termination can take place upon entry or within a notice period issued to the tenant.

Forfeiture should be approached with caution, especially if there is a dilapidation dispute. Forfeiting a lease instead of letting it to a new tenant can lead to a loss of income while it is left vacant. Tenants also have the right to apply for relief from forfeiture.

Get in touch with our dilapidation claims solicitors in Bristol

Our commercial property disputes solicitors are experienced in advising on commercial lease dilapidation claims and are here to help. Call us on 0117 325 2929 or complete our online enquiry form.