Dilapidations in Tenanted Offices

Tenant

I’m sure most people reading this have their own idea of what dilapidations are but for the record, they concern repairs which have not been carried out but should have been according to the repairing clause in the lease agreement.

Sometimes reinstatement is confused with dilapidations but that refers to making good a tenant’s alterations. A landlord may accept the alterations as they have enhanced the value of a building. Discussion and agreement in writing at the time they are carried out is helpful. Your fit-out company and solicitor, as well as the landlord meeting together when planning alterations will help iron out any problems, written agreement should be obtained.

Landlord

From the landlord’s perspective, as well as the tenant’s, it would be good practice to discuss openly what is expected of the tenant well before the end of the tenancy, the first step is at the time the agreement for the tenancy is drawn up. Your interior fit-out company can give an estimate of the cost of repairs including a forecast for doing them in the future.

Special consideration may be needed where a building or part is taken over which is in need of repair and the tenant agrees to carry these out as part of the office fit-out. The full terms will , in any case, need to lay out when the final condition of the building is expected to be assessed and what s required. If the landlord has a new tenant lined up, any work required by the new tenant can be taken into account though no one wants to pay for anyone else’s obligations.

Straightforward

An office building which suits a new tenant and requires no alterations during the tenancy may only need agreement on condition at entry and maintaining that condition is all that is necessary.

Paying

A cash payment can be made to the landlord funded through normal cash flow. Payments such as rental deposits, solicitor’s fees and removal costs can be significant and must be factored into any overall budget as well as dilapidation costs and many of our customers have incurred significant expense for the premises they are leaving when they move offices.  Such additional costs can significantly add up and even be as high as a new office fit-out but can be paid via a finance agreement.

No agreement possible?

The Dilapidations Protocol was formally adopted by the Court Rules on 1st January 2012, and is now therefore Law in England & Wales, it sets out a framework for how to carry out a dilapidations claim on commercial property. Although there is no legal requirement to follow the protocol, though in the event a dispute went to court, a party not having followed the protocols would be at a disadvantage.

Enjoy your workspace

Contact us on 01553 811833 or email info@officescapellp.co.uk  if you would like us to help with your dilapidation repairs as part of or seperate to your new office fit-out.