What is it
Dilapidations arise when a tenant has failed to maintain a property in breach of repairing obligations which are contained in a lease.
Dilapidations can arise during the term of the lease; but more commonly arise at the end of the term (known as Terminal Dilapidations).
Schedule of Dilapidations
To ensure that the premises is put back into state of repair required by the lease, the landlord serves on the tenant a Schedule of Dilapidations. This is a list of items that are in disrepair and requires the tenant to comply with its repairing obligation by undertaking the works. The Schedule also include a quantified demand (details of the cost to put the property back into repair).
In some circumstances, it is beneficial for the landlord to have a Schedule drawn up prior to the end of the lease as this allows the tenant sufficient time to carry out the required repairs. As the lease is still effective, the tenants do still have an interest, and therefore carrying out the repairs will also be for their benefit, as they may be able to undertake the works at lower cost than that detailed in the quantified demand. It is also places the property into a lettable state, meaning that the landlord can immediately relet. Once a lease has come to an end, the tenant cannot carry out the required repairs and therefore, the only alternative is to pay the sum detailed in the quantified demand.
Remedies available to landlords
If a tenant is in breach of a repairing covenant, there are remedies available however, there are certain statutory restrictions and therefore, it is imperative that these terms are agreed and specified in the lease.
If a tenant fails to comply with its repairing covenant, the landlord may be entitled to the following:
- Specific performance
However, each remedy has specific criteria to be met, and some are not available once a lease has come to an end, and therefore it is important to seek legal advice if you do wish to pursue a claim.