Dilapidations is a specific area of law relating to the state of disrepair to a property that has occurred during a tenant’s period of occupation and may relate to interior or exterior of the property. They represent any costs to the Tenant at the end of a Lease however they can sometimes be served on a Tenant during their Lease. It is important to ensure that a property is kept in a good state of repair for any future tenant.
What is included in a Schedule of Dilapidations?
Typically, a schedule of dilapidations is prepared by the Landlord with the help of a surveyor and at the end of a tenancy to determine the condition of the property in question. The surveyor will inspect the property and prepare the schedule which will include the following:
- A list of any breaches of covenant by the Tenant.
- The clauses that outline the tenant’s obligations when it comes to the condition the property should be returned in and list of any alterations required of the tenant during the term of the Lease.
- Request for any repairs required of the tenant and the estimated cost of the same.
How are Dilapidations enforced?
The rights and responsibilities of both landlords and tenants regarding the maintenance and repair are governed by the Landlord and Tenant Act 1927.
What are Landlord Dilapidations?
These refer to any repairs and maintenance that are the responsibility of the landlord as per the Lease but have been neglected during the tenancy. They can include repairs to the roof, walls, and foundations, as well as repairs to any fixtures and fittings included, such as boilers and electrical systems.
How long does a Landlord have to claim Dilapidations?
Landlords should begin thinking about these in advance of the end of the Lease term and a claim can be made by the Landlord towards the end of a Lease, or after a Lease has ended. They will have 6 years from the date of the Tenant’s vacating the property to make a claim, known as the limitation period.
Tenant’s Defence/ Supersession
Tenants must be careful before signing their Lease that they understand the obligations for repair and maintenance upon vacating the premises. Subtleties in the Lease clause wording can significantly affect a Tenant’s liabilities, so they should start thinking about dilapidations when they first begin looking at a property and are discussing heads of terms with your prospective Landlord.
A Schedule of Condition can be useful to help limit liability under a Lease. Knowing a property’s condition from the very start will help to avoid signing a Lease that states it’s in good condition, when it isn’t.
A tenant’s liability for dilapidations is limited by Section 18 of the Landlord and Tenants Act 1927. It means that if a landlord were to make a claim, there are limits on what the Landlord can recover from the Tenant if they decide not to carry out works to remedy dilapidations. There are two aspects of the Act that have the potential to what the Tenant owes:
1) If the Landlord intends to alter the property at the end of the tenancy or shortly thereafter meaning the repairs could be considered valueless, or if the property is to be demolished, this means no repair costs can be recovered by the Landlord from the Tenant.
2) By calculating the difference by which the value of the Landlord’s interest has been reduced on account of any breaches noted. A diminution valuation is undertaken to determine this cap.
What is a Section 146 notice?
A Section 146 Notice of the Law and Property Act 1925 is a notice served by a Landlord to a Tenant under the Law of Property Act 1925 who wishes to commence forfeiture proceedings. This notice is typically served when the Tenant is in breach of their repairing obligations under the Lease agreement and serves as a warning that the Landlord may take legal action if the repairs are not made. The notice It outlines the repairs that are needed to the property and the estimated costs of the same. The Tenant is allowed a reasonable time to remedy the breach to the satisfaction of the Landlord, following receipt of the notice.