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Property Topics - Dilapidations

The subject of Dilapidations encompasses decoration, repair, alterations and reinstatement obligations.

The lease usually sets out the tenant’s obligations relating to these, but will rarely set out the implications of failure to comply save an all encompassing but rarely used forfeiture procedure (loss of possession) for alleged breaches of any obligations during the term.

It is important for all tenants of commercial property to be aware of dilapidations and the implications for maintenance/repair strategies and financial planning.

Dilapidations are a complex subject, governed by the tenant’s lease terms, statute and case law, the latter having evolved over many years.

A dilapidations liability can arise during the term of a lease, but more commonly materialises either at the end or approaching the end or determination of a lease.

It is therefore very important for tenants to consider these issues in good time before the end of their lease. Dilapidations are one of the most common aspects of leasehold obligations that often catch tenants unaware and are frequently exploited by landlords through carefully considered strategies.

Unless expressly stated within the lease to the contrary, a landlord is under no obligation (although it is considered good practice that he should do so) to raise matters with the tenant relating to dilapidation responsibilities during or after the term of the lease and so it is the tenant’s responsibility to be aware of and deal with any alleged breaches of these.

Landlords often avoid raising the matter until after a lease has expired and seek to submit a claim for financial damages when the tenant no longer has the opportunity to undertake works of decoration or repair themselves. The landlord is generally entitled to make any claim up to six years after the expiry of a lease!

IMPORTANT DISCLAIMER
*This document is prepared as a brief guide and must not be relied upon or considered as comprehensive. Professional advice should always be sought.

If you have a specific query, visit the property professionals section of the site and e-mail one or all of the property agents listed. Each firm selected by this site has departments with expertise in this field.

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