Dilapidations Claims - A New Regime?

Author:Mr Andrew Olins
Profession:Iliffes Booth Bennett

The Changing Role Of Surveyors.

We now have some idea of how the Woolf reforms work and how the surveyor's role in property litigation has altered. Let us consider the role that the surveyor now plays in a typical dilapidations claim. Andrew Olins, Commercial Property Litigation specialist.

The first thing to bear in mind is that such a claim is likely to end up in the Technology and Construction Court (whether in London or outside in one of the major litigation centres). This usually means a tight timetable being imposed by a Judge who will see the case through from the first Case Management Conference up to (and possibly including) trial.

But before we even get there we should consider what strategies the landlord should adopt where premises are in disrepair.

In our view, an early decision needs to be made as to whether you want the repairs carried out or a cash settlement. For example it is important to get your strategic thinking right before the lease ends.

If your objective is to have the work carried out consider the landlord's self-help remedy as a way around the Leasehold Property (Repairs) Act 1938. (This Act of course restricts the ability of the landlord to forfeit on grounds of disrepair during the course of the lease.)

If the lease includes a "self-help" clause the landlord is entitled to carry out the work and recover the costs (see Jervis v. Harris [1996] 1 EGLR 78) - costs of the repairs is a debt due under the lease; not a claim for damages under the Act. Because the tenant knows that this remedy can be expensive for him, the mere threat is often sufficiently effective. (There is no statutory cap either.)

Subject to Human Rights Act 1998 objections this will always remain a useful threat where the lease provides. If on the other hand the landlord wants a building not in repair but a financial settlement (because he has other plans for it) then the best thing is to delay serving the dilapidations schedule until the lease has ended. (Once the lease has ended the tenant no longer has the right to do the work.)

But before you commit your thoughts to paper (or e-mail) you must think carefully about the fact that you may have to give disclosure of all this material in any subsequent litigation. If your real motive is not repair but to maximise the damages claim where you have other plans for your building these internal exchanges before as well as after the lease ends will be disclosable in the eventual proceedings.


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