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GUIDE TO DILAPIDATIONS ISSUES
What is the standard of repair?
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| How should breaches be established? |
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| How should a claim be prepared? |
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| What are the limits on a claim? |
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What is the standard of repair ?
Consider the extent of the repairing obligations imposed by
the lease. Bear in mind that:
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an obligation to keep a property in repair
will generally require a tenant to put the property into
repair; |
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when assessing the appropriate standard
of repair, the Court will consider the age, character
and locality of the premises; |
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a liability for repair does not usually
involve making improvements; |
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inherent defects do not generally constitute
disrepair, but defects could still cause disrepair for
which the tenant is liable; |
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any Schedule of Condition attached
to the lease will restrict the extent of the repairs required. |
How should breaches be established?
Landlords and tenants can establish whether there has been
a breach of the repairing obligations by instructing a surveyor
to inspect the property and prepare a Schedule of Dilapidations.
For Schedules prepared for service on a defaulting party,
the Schedule should identify the breaches, i.e. the items
which do not meet the standard of repair required by the lease,
and specify the appropriate remedies required. Photographs
and/or video evidence are helpful for proving breach.
How should a claim be prepared?
Landlords should consider the standards set down by the draft
dilapidations pre-action protocol for terminal dilapidations
claims - see www.pla.org.uk for full details. The protocol
is not part of the Civil Procedure Rules but the Court may
have regard to the standards set down by the protocol when
assessing whether the parties have behaved reasonably in dealing
with a dispute.
The protocol only aims to set out best practice and rigid
compliance is not required - consider whether the detailed
steps set down by the protocol are required in your particular
case.
In accordance with the protocol, landlords will probably
want to:
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Serve a Schedule of Dilapidations within
a reasonable time after the expiry of the tenancy, ideally
not more than 2 months later. (N.B. If the landlord wants
the tenant to carry out the necessary repairs before the
tenant vacates the property, it should obviously serve
a Schedule well before the expiry of the lease.) |
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Arrange a meeting with the tenant to discuss
the Schedule. |
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Ask the tenant to respond to the Schedule
within a reasonable time - the protocol suggests that
the tenant should respond within 2 months after service
of the Schedule. |
Depending on the circumstances, landlords may also want to
follow these parts of the protocol:
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Allow space in the Schedule of Dilapidations
for the tenant's comments to be incorporated into it.
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Set out the claim in a separate document,
with a clear breakdown and summary of the claim. |
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If the repair works have not yet been carried
out, arrange for a Section 18(1) valuation to be prepared
and served on the tenant. |
What are the limits on a claim?
Bear in mind section 18(1) of the Landlord and Tenant
Act 1927.
The two elements of section 18 are known as the two "limbs":
The first limb:
Any damages for dilapidations will be limited to the amount
by which the value of the landlord's reversion is diminished
as a result of the tenant's breaches (see Ultraworth Limited
v General Accident Fire & Life Assurance Corporation plc
& Buhler Limited (2000)); and
The second limb:
A landlord cannot recover damages where it intends to pull
down the property at or shortly after the termination of the
tenancy, or for repairs where the landlord intends to carry
out structural alterations within that same period which would
make those repairs by the tenant valueless.
For the first limb, the court or arbitrator will look at
the value of the whole of the landlord's reversion and not
simply the landlord's reversion of the premises. It can be
difficult to prove that there has been a diminution in the
value of a reversion where only part of a building is in disrepair.
When considering the second limb, the main points to consider
are:
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when any works are to be carried out (i.e.
are the works to be carried out "at or shortly after
the termination of the tenancy"?); |
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whether the works are sufficiently comprehensive
to fall within the ambit of the second limb; and |
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whether the landlord had formed the relevant
level of intention to carry out the works at the time
the lease ended. |
For further information or advice please contact propertylitigation@charlesrussell.co.uk
These notes represent only an outline summary
of relevant principles and detailed advice should always be
sought in particular cases.
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