What are Dilapidations?

What governs Dilapidations?

• Common Law:  This draws from judge-led decisions in Civil Courts predominantly in Contract Law but also in Tort. There is a vast amount of case Law in relation to leasehold property matters.

   

• Statute:

  • Landlord and Tenant Act 1927, Section 18(1), limbs 1 & 2.
  • Law of Property Act 1925, Sections 146 & 147.
  • Leasehold Property (Repairs) Act 1938.

   

• Dilapidations Protocol: This was introduced in January 2012 to encourage transparent pre-litigation correspondence between the parties, i.e. Landlord and Tenant. It sets out timeframes for serving and responding to notices and notes what to include, not include in a claim with emphasis on them being accurate and honest.

   

Tenants' responsibilities

Tenants are usually responsible for keeping the property in a ‘good state of repair’ during and at the end of their lease term.  This will include remedying any damage that occurs during their occupation and complying with all lease covenants.

Terminal Dilapidations

At the end of a lease term, the landlord can instruct a final inspection of the property.  A Terminal Schedule of Dilapidations is commonly served within the last 12 months of a lease term and will include all items which need to be carried out by the tenant to comply with their lease obligations such as repair, decoration, reinstatement and statutory compliance items.

Financial Implications

Dilapidations can have significant financial implications for tenants should they fail to comply with their lease obligations.  They may be required to pay for costs of repairs and redecoration or any compensation should they fail to meet them.  It is therefore important that all parties fully understand these obligations prior to any lease agreement being undertaken.