End of a lease - Dilapidation on a building to be demolished
Discussion
I used to work for a City firm that moved out of an office block after many years of tenancy. We were due to pay a large amount for dilaps as I recall, about a quarter of a million. The landlord posted notices outside the building to the effect that they had applied for permission to demolish and apparently that saved us from paying the large bill. The way the story was related to me, if the landlord had only waited a few more days they would have got paid.
The building is still standing empty now, six years later.
The building is still standing empty now, six years later.
I'm a building surveyor and there is no loss to the landlord therefore no dilaps claim. Obviously you will need to establish wether it is being demolished - they will need planning permission to drop it so check with planning. Likewise if they maintain the demolition has been mothballed then you will need to draw up some form of agreement that any monies paid for the dilaps if the building is dropped within say 4 years is paid back. You could also have recourse under the mis representation act also if they knowingly claim a false dilaps
Hope this helps
Rob
Hope this helps
Rob
MJG280 said:
dartissimus said:
How about refusing to vacate, leaving them with a potential bill for eviction and delays to their schedule ?
Just asking - not an expert
Don't do this as you will still be liable for rent and costs to evict you.Just asking - not an expert
What never fails to amaze me is that so many people do not get professional advice from a surveyor when dealing with commercial property, it often saves a fortune.
Just an update. A preliminary schedule of dilapidations has been itemised and emailed over. In total it lists the cost of work to be 25k but they will settle for half that for a quick settlement before a formal schedule of dilapidations is prepared which will cost more. 10% of that is the admin fee and £800 is for the preparation of the initial inspection.
I spoke to a well known local surveyor but they weren't too useful other than advising I speak to a solicitor who specialises in dilapidations.
I checked my lease and these are the terms that they have drawn up the dilapidations based on:
- Pay the reasonable and proper costs and expenses of the landlord for the preparation and service of a schedule of dilapidations.
- Keep the property in good repair and condition.
- Decorate the outside and inside of the property in the last three months before the end of the term.
- Not make any alterations without consent.
- Yield up the property to the landlord including the removal of chattels and alterations.
From this they have come up with loads of costs which to me are ridiculous. Theres a £6k cost for replacing all the cladding panels which they say are damaged when there might be the slightest dint the size of a golf ball on maybe 3/4 places and which I can prove was already there at the time that I moved in.
They also keep quoting that I am supposed to have loads of certificates for gas, electricity, fire alarm (which I can prove was damaged) and even asbestos review on the building, to 'comply with statute'. How does this work - is this my obligation or the landlords if I was never offered these in the first place.
Even for decoration in the last three months, the majority of the property was painted including the shutters and is infinitely smarter than when we first took on the property yet they still quote £4k for this.
Right now I'm still confused at to the position I should take with responding to this whole thing. The dilapidations specialist will be expecting a reply pretty soon or they will start putting the pressure on me and probably make indirect threats of extra costs etc. I've been warned that the landlord is known for being aggressive with handling stuff like this.
My options are to either:
- argue the value of the dilapidations to try and reduce it to a smaller amount. I heard a neighbouring tenant settled on a quarter of the initial request.
- argue that the building is due to be knocked down so dilapidations are invalid and so should not be charged.
I looked into the planning permission on the building and the planning officer dealing with this property has advised that they are 'minded to grant' pending a section 106 legal agreement to secure various developer contributions which will take at least a few weeks.
Am I right in thinking that if I can procrastinate this whole thing over at least the next few weeks and they even start to knock the building down then all dilapidation claims become invalid and I won't have to pay them a penny (Or will I still have to pay them the cost of putting together the schedule of dilapidations as agreed in the lease.
What is the best way to procrastinate? If I arrange a meeting, ask some questions, send some emails all based around the initial dilapidation itemised costs, which they will probably answer, will this just be adding costs to the whole situation. Or should I just go and see a solicitor to advise me further. Last thing I want is to have spent a load of money speaking to a solicitor to then still end up paying big costs.
As far as the 1954 act. I know that the lease was initially a sublease and I had to sign away my security of tenure because I always knew they wanted to develop it after my time in there. I too had a subtenant at the end of the lease and even then they made a big issue with these tenants being there incase they exercised any security of tenure so they threatened me with breach of my lease unless the tenants too signed away their security of tenure.
Thanks for all the help and advice - As a one man band up against a multi million pound company employing 200 people with their own in house law team I need all the help I can get, haha!
I spoke to a well known local surveyor but they weren't too useful other than advising I speak to a solicitor who specialises in dilapidations.
I checked my lease and these are the terms that they have drawn up the dilapidations based on:
- Pay the reasonable and proper costs and expenses of the landlord for the preparation and service of a schedule of dilapidations.
- Keep the property in good repair and condition.
- Decorate the outside and inside of the property in the last three months before the end of the term.
- Not make any alterations without consent.
- Yield up the property to the landlord including the removal of chattels and alterations.
From this they have come up with loads of costs which to me are ridiculous. Theres a £6k cost for replacing all the cladding panels which they say are damaged when there might be the slightest dint the size of a golf ball on maybe 3/4 places and which I can prove was already there at the time that I moved in.
They also keep quoting that I am supposed to have loads of certificates for gas, electricity, fire alarm (which I can prove was damaged) and even asbestos review on the building, to 'comply with statute'. How does this work - is this my obligation or the landlords if I was never offered these in the first place.
Even for decoration in the last three months, the majority of the property was painted including the shutters and is infinitely smarter than when we first took on the property yet they still quote £4k for this.
Right now I'm still confused at to the position I should take with responding to this whole thing. The dilapidations specialist will be expecting a reply pretty soon or they will start putting the pressure on me and probably make indirect threats of extra costs etc. I've been warned that the landlord is known for being aggressive with handling stuff like this.
My options are to either:
- argue the value of the dilapidations to try and reduce it to a smaller amount. I heard a neighbouring tenant settled on a quarter of the initial request.
- argue that the building is due to be knocked down so dilapidations are invalid and so should not be charged.
I looked into the planning permission on the building and the planning officer dealing with this property has advised that they are 'minded to grant' pending a section 106 legal agreement to secure various developer contributions which will take at least a few weeks.
Am I right in thinking that if I can procrastinate this whole thing over at least the next few weeks and they even start to knock the building down then all dilapidation claims become invalid and I won't have to pay them a penny (Or will I still have to pay them the cost of putting together the schedule of dilapidations as agreed in the lease.
What is the best way to procrastinate? If I arrange a meeting, ask some questions, send some emails all based around the initial dilapidation itemised costs, which they will probably answer, will this just be adding costs to the whole situation. Or should I just go and see a solicitor to advise me further. Last thing I want is to have spent a load of money speaking to a solicitor to then still end up paying big costs.
As far as the 1954 act. I know that the lease was initially a sublease and I had to sign away my security of tenure because I always knew they wanted to develop it after my time in there. I too had a subtenant at the end of the lease and even then they made a big issue with these tenants being there incase they exercised any security of tenure so they threatened me with breach of my lease unless the tenants too signed away their security of tenure.
Thanks for all the help and advice - As a one man band up against a multi million pound company employing 200 people with their own in house law team I need all the help I can get, haha!
Much of this is going to depend on the wording in your lease. Any help (not advice) I give is on the basis that you need to get a specialist Building Surveyor to assist you. I can recommend someone if need be in Newcastle who I have acted against elsewhere.
In general terms:
Commercial Leases are different to residential, far less protection. Many tenants will have put and keep in repair. This means you may have to deliver the property in better repair than you took it.
If there is no diminution to value than you can side step the repair. Odd one is fine. Loads you'll have to accept depending on your lease.
Reports are normally requested. It's a bit of a grey area, and I'm normally successful in arguing that they are not required, except where statute kicks in. There is no statutory requirement* in a commercial property to have a gas certificate, electrical certificate, fire alarm certificate. There is a requirement to have an Asbestos Review. Ask them for the Statute.
Decoration - Did it express coats of paint etc. Did you comply? Have you receipts for paint/decorators etc?
Demolition - I've never had to fight one of these. Planning etc. is a good idea, as is a clawback should they demolish. This is where you need expert advice in particular.
Putting it bluntly if you are looking at a claim of £25K it is worth employing your own specialist!
PS - I have routinely settled claims at 50% of Landlords initial cost. Don't be too alarmed yet.
In general terms:
Commercial Leases are different to residential, far less protection. Many tenants will have put and keep in repair. This means you may have to deliver the property in better repair than you took it.
If there is no diminution to value than you can side step the repair. Odd one is fine. Loads you'll have to accept depending on your lease.
Reports are normally requested. It's a bit of a grey area, and I'm normally successful in arguing that they are not required, except where statute kicks in. There is no statutory requirement* in a commercial property to have a gas certificate, electrical certificate, fire alarm certificate. There is a requirement to have an Asbestos Review. Ask them for the Statute.
Decoration - Did it express coats of paint etc. Did you comply? Have you receipts for paint/decorators etc?
Demolition - I've never had to fight one of these. Planning etc. is a good idea, as is a clawback should they demolish. This is where you need expert advice in particular.
Putting it bluntly if you are looking at a claim of £25K it is worth employing your own specialist!
PS - I have routinely settled claims at 50% of Landlords initial cost. Don't be too alarmed yet.
- It's still a good idea to do so!
They have said they will settle quickly on half the amount so £12.5k for a quick settlement. I know another neighbour settled on just over £6k but his solicitor said he made the mistake of putting a figure in their heads. Obviously no work has been carried out and they have instead began the internal demolition of the property.
Been recommended two local surveyors through contacts - One is well known and works for a big national firm so I'm a bit worried about how much more they will charge. The other has still acted locally for some big companies and they advised me that just the fact that planning permission being in place is enough to negate any claim they have for dilapidations although I think i might still have to pay for that schedule to be put in place.
Thanks for the advice surveyor - one last thing - can you advise on what I should be paying for a surveyor to start the consultation initially. Does £600 sound about right. Obviously it will depend on how far they drag this out and how big the disputed claim becomes.
Thank
Been recommended two local surveyors through contacts - One is well known and works for a big national firm so I'm a bit worried about how much more they will charge. The other has still acted locally for some big companies and they advised me that just the fact that planning permission being in place is enough to negate any claim they have for dilapidations although I think i might still have to pay for that schedule to be put in place.
Thanks for the advice surveyor - one last thing - can you advise on what I should be paying for a surveyor to start the consultation initially. Does £600 sound about right. Obviously it will depend on how far they drag this out and how big the disputed claim becomes.
Thank
ItsTony said:
They have said they will settle quickly on half the amount so £12.5k for a quick settlement. I know another neighbour settled on just over £6k but his solicitor said he made the mistake of putting a figure in their heads. Obviously no work has been carried out and they have instead began the internal demolition of the property.
Been recommended two local surveyors through contacts - One is well known and works for a big national firm so I'm a bit worried about how much more they will charge. The other has still acted locally for some big companies and they advised me that just the fact that planning permission being in place is enough to negate any claim they have for dilapidations although I think i might still have to pay for that schedule to be put in place.
Thanks for the advice surveyor - one last thing - can you advise on what I should be paying for a surveyor to start the consultation initially. Does £600 sound about right. Obviously it will depend on how far they drag this out and how big the disputed claim becomes.
Thank
That sounds about right to me, but I don't work in that way so difficult to be sure. I'd suggest making sure that the fee is related to success in some way and capped - or straight forward hourly rate. The landlords have done the bulk of the painful work....Been recommended two local surveyors through contacts - One is well known and works for a big national firm so I'm a bit worried about how much more they will charge. The other has still acted locally for some big companies and they advised me that just the fact that planning permission being in place is enough to negate any claim they have for dilapidations although I think i might still have to pay for that schedule to be put in place.
Thanks for the advice surveyor - one last thing - can you advise on what I should be paying for a surveyor to start the consultation initially. Does £600 sound about right. Obviously it will depend on how far they drag this out and how big the disputed claim becomes.
Thank
I disagree about the planning angle though. Just because PP is in place does not mean a landlord has to carry out the development. Could lead to some interesting discussions potentially.
surveyor said:
+1 - missed that?
Although I suspect that it just means internal partitions going OP?
Its on one of the other adjoining units that have already moved out. Theres been work going on with trucks moving rubble out from the building so I'm assuming they have already started pulling down the none structural parts - maybe internal offices etc. The old tenants from this unit have been out for a good 4 months already. I just meant does this in any way mean that its more evidence of their intention to demolish it. Although I suspect that it just means internal partitions going OP?
I don't have evidence of it but we had people come into our warehouse to quote on knocking the whole thing down for the landlord at the end of November maybe a month before the end of the lease.
Also, I think it would be in their interests to get the project started as soon as possible - its another student accommodation development so I'd assume it would be timed to be completed by next summer so that they can started moving people in for the new term in September 2015. Someone guessed that another one of their developments began in October and was finished in time for June/July.
If they're talking about £25k dilaps and settling for even half of that, you need to speak to a specialist building surveyor and solicitor who specialises in this field.
Do not look for advice on a car website forum. There's clearly people who know their stuff, but it's no substitute for proper in-the-person advice from people who can resolve this correctly for you.
Do not look for advice on a car website forum. There's clearly people who know their stuff, but it's no substitute for proper in-the-person advice from people who can resolve this correctly for you.
Muzzer79 said:
If they're talking about £25k dilaps and settling for even half of that, you need to speak to a specialist building surveyor and solicitor who specialises in this field.
Do not look for advice on a car website forum. There's clearly people who know their stuff, but it's no substitute for proper in-the-person advice from people who can resolve this correctly for you.
ThisDo not look for advice on a car website forum. There's clearly people who know their stuff, but it's no substitute for proper in-the-person advice from people who can resolve this correctly for you.
Tony
i've put my comments below - hope this helps
I checked my lease and these are the terms that they have drawn up the dilapidations based on:
- Pay the reasonable and proper costs and expenses of the landlord for the preparation and service of a schedule of dilapidations.
RH- Yes this is normal you cop for all the costs
- Keep the property in good repair and condition.
RH- to keep you first have to put the property in repair therefore unless you can prove the defect was there when you took it on i.e through a schedule of condition attached to the lease its hard to defend.
- Decorate the outside and inside of the property in the last three months before the end of the term.
RH - Again has to be to the lease standards and probably the colours agreed with the landlord ?
- Not make any alterations without consent.
RH standard clause and you'd have to remove any alterations unless you can prove its betterment.
- Yield up the property to the landlord including the removal of chattels and alterations.
Yep remove all your stuff else they'll cost for skips and the like for removal etc.
From this they have come up with loads of costs which to me are ridiculous. Theres a £6k cost for replacing all the cladding panels which they say are damaged when there might be the slightest dint the size of a golf ball on maybe 3/4 places and which I can prove was already there at the time that I moved in.
RH - As per my comment on put and keeping in repair.
They also keep quoting that I am supposed to have loads of certificates for gas, electricity, fire alarm (which I can prove was damaged) and even asbestos review on the building, to 'comply with statute'. How does this work - is this my obligation or the landlords if I was never offered these in the first place.
RH - Not applicable strike those costs our straight away. The duty of care for these certificates are between you and your employees only not between you and the landlord. Is the fire alarm the landlords or did you put it in ?
Even for decoration in the last three months, the majority of the property was painted including the shutters and is infinitely smarter than when we first took on the property yet they still quote £4k for this.
RH - Can you prove last 3 months and to lease requirements and confirmation of approval of colours from landlord ?
Right now I'm still confused at to the position I should take with responding to this whole thing. The dilapidations specialist will be expecting a reply pretty soon or they will start putting the pressure on me and probably make indirect threats of extra costs etc. I've been warned that the landlord is known for being aggressive with handling stuff like this.
RH - get a Building surveyor involved or dilapidations solicitor - Michael Watson at shulmans solicitors in Leeds is a guru on dilaps.
My options are to either:
- argue the value of the dilapidations to try and reduce it to a smaller amount. I heard a neighbouring tenant settled on a quarter of the initial request.
RH - Yes an option.
- argue that the building is due to be knocked down so dilapidations are invalid and so should not be charged.
RH - They will argue that its not going to be done. Tell them if its their intention to do the work then fair enough but if they knock it down you need an agreement the money will be paid back.
RH - Other options - On the basis the lease has expires this is a claim for damages i.e a cash settlement. Therefore tell them to undertake the works as per the dilapidations schedule and you'll inspect once complete to agree the works that have been done and the costs thereon. If its their intention to take your money for the demolition they arent going to want to fork £25k out are they and might cave in !
RH - Another option is get a section 18/1 valuation undertaken that will set the maximum diminution that they can claim. i.e it sets the value of the current condition against what they could get if it was in a condition as per the lease. A decent 18/1 will probably set you back £1500 but it might save you money in the long run.
I looked into the planning permission on the building and the planning officer dealing with this property has advised that they are 'minded to grant' pending a section 106 legal agreement to secure various developer contributions which will take at least a few weeks.
Am I right in thinking that if I can procrastinate this whole thing over at least the next few weeks and they even start to knock the building down then all dilapidation claims become invalid and I won't have to pay them a penny (Or will I still have to pay them the cost of putting together the schedule of dilapidations as agreed in the lease.
RH - yes you are correct you are in no rush to settle as the lease has finished and yes if they knock it down there is nil dilaps and id tell them to stuff all other costs where the sun doesnt shine as they have in accurately served the dilaps ! generally you have 56 days to respond to a claim as per the pre action protocol.
What is the best way to procrastinate? If I arrange a meeting, ask some questions, send some emails all based around the initial dilapidation itemised costs, which they will probably answer, will this just be adding costs to the whole situation. Or should I just go and see a solicitor to advise me further. Last thing I want is to have spent a load of money speaking to a solicitor to then still end up paying big costs.
RH - take your time your not in a rush to settle - they are !
As far as the 1954 act. I know that the lease was initially a sublease and I had to sign away my security of tenure because I always knew they wanted to develop it after my time in there. I too had a subtenant at the end of the lease and even then they made a big issue with these tenants being there incase they exercised any security of tenure so they threatened me with breach of my lease unless the tenants too signed away their security of tenure.
Thanks for all the help and advice - As a one man band up against a multi million pound company employing 200 people with their own in house law team I need all the help I can get, haha!
RH - Generally as a surveyor we'd charge £600 - £1,500 depending on size of property for a dilaps so on a small industrial unit 600-800 is the norm. Likewise a similar amount for negotiation to a full and final settlement.
Hope the above helps
Rob
i've put my comments below - hope this helps
I checked my lease and these are the terms that they have drawn up the dilapidations based on:
- Pay the reasonable and proper costs and expenses of the landlord for the preparation and service of a schedule of dilapidations.
RH- Yes this is normal you cop for all the costs
- Keep the property in good repair and condition.
RH- to keep you first have to put the property in repair therefore unless you can prove the defect was there when you took it on i.e through a schedule of condition attached to the lease its hard to defend.
- Decorate the outside and inside of the property in the last three months before the end of the term.
RH - Again has to be to the lease standards and probably the colours agreed with the landlord ?
- Not make any alterations without consent.
RH standard clause and you'd have to remove any alterations unless you can prove its betterment.
- Yield up the property to the landlord including the removal of chattels and alterations.
Yep remove all your stuff else they'll cost for skips and the like for removal etc.
From this they have come up with loads of costs which to me are ridiculous. Theres a £6k cost for replacing all the cladding panels which they say are damaged when there might be the slightest dint the size of a golf ball on maybe 3/4 places and which I can prove was already there at the time that I moved in.
RH - As per my comment on put and keeping in repair.
They also keep quoting that I am supposed to have loads of certificates for gas, electricity, fire alarm (which I can prove was damaged) and even asbestos review on the building, to 'comply with statute'. How does this work - is this my obligation or the landlords if I was never offered these in the first place.
RH - Not applicable strike those costs our straight away. The duty of care for these certificates are between you and your employees only not between you and the landlord. Is the fire alarm the landlords or did you put it in ?
Even for decoration in the last three months, the majority of the property was painted including the shutters and is infinitely smarter than when we first took on the property yet they still quote £4k for this.
RH - Can you prove last 3 months and to lease requirements and confirmation of approval of colours from landlord ?
Right now I'm still confused at to the position I should take with responding to this whole thing. The dilapidations specialist will be expecting a reply pretty soon or they will start putting the pressure on me and probably make indirect threats of extra costs etc. I've been warned that the landlord is known for being aggressive with handling stuff like this.
RH - get a Building surveyor involved or dilapidations solicitor - Michael Watson at shulmans solicitors in Leeds is a guru on dilaps.
My options are to either:
- argue the value of the dilapidations to try and reduce it to a smaller amount. I heard a neighbouring tenant settled on a quarter of the initial request.
RH - Yes an option.
- argue that the building is due to be knocked down so dilapidations are invalid and so should not be charged.
RH - They will argue that its not going to be done. Tell them if its their intention to do the work then fair enough but if they knock it down you need an agreement the money will be paid back.
RH - Other options - On the basis the lease has expires this is a claim for damages i.e a cash settlement. Therefore tell them to undertake the works as per the dilapidations schedule and you'll inspect once complete to agree the works that have been done and the costs thereon. If its their intention to take your money for the demolition they arent going to want to fork £25k out are they and might cave in !
RH - Another option is get a section 18/1 valuation undertaken that will set the maximum diminution that they can claim. i.e it sets the value of the current condition against what they could get if it was in a condition as per the lease. A decent 18/1 will probably set you back £1500 but it might save you money in the long run.
I looked into the planning permission on the building and the planning officer dealing with this property has advised that they are 'minded to grant' pending a section 106 legal agreement to secure various developer contributions which will take at least a few weeks.
Am I right in thinking that if I can procrastinate this whole thing over at least the next few weeks and they even start to knock the building down then all dilapidation claims become invalid and I won't have to pay them a penny (Or will I still have to pay them the cost of putting together the schedule of dilapidations as agreed in the lease.
RH - yes you are correct you are in no rush to settle as the lease has finished and yes if they knock it down there is nil dilaps and id tell them to stuff all other costs where the sun doesnt shine as they have in accurately served the dilaps ! generally you have 56 days to respond to a claim as per the pre action protocol.
What is the best way to procrastinate? If I arrange a meeting, ask some questions, send some emails all based around the initial dilapidation itemised costs, which they will probably answer, will this just be adding costs to the whole situation. Or should I just go and see a solicitor to advise me further. Last thing I want is to have spent a load of money speaking to a solicitor to then still end up paying big costs.
RH - take your time your not in a rush to settle - they are !
As far as the 1954 act. I know that the lease was initially a sublease and I had to sign away my security of tenure because I always knew they wanted to develop it after my time in there. I too had a subtenant at the end of the lease and even then they made a big issue with these tenants being there incase they exercised any security of tenure so they threatened me with breach of my lease unless the tenants too signed away their security of tenure.
Thanks for all the help and advice - As a one man band up against a multi million pound company employing 200 people with their own in house law team I need all the help I can get, haha!
RH - Generally as a surveyor we'd charge £600 - £1,500 depending on size of property for a dilaps so on a small industrial unit 600-800 is the norm. Likewise a similar amount for negotiation to a full and final settlement.
Hope the above helps
Rob
s2kjock said:
johnfm said:
You will probably want the advice of a good property litigation lawyer.
You can probably get some good initial advice from a good one for less than £500 - if that.
The landlord might take the piss - so you might need decent advice.
Is it not surveyors who normally advise on dilaps claims?You can probably get some good initial advice from a good one for less than £500 - if that.
The landlord might take the piss - so you might need decent advice.
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