Dilapidations disputes are on the rise according to one of the UK’s leading property consultancies. Tuffin Ferraby Taylor (TFT) reports that the recession has led to a 25 per cent increase in disputes between landlords and tenants at the end of commercial property leases.
These disputes arise when tenants ignore or fail to understand their obligations and leave the building in an altered state or in a state of disrepair when they vacate the property. Landlords will then seek to safeguard their interests by pursuing a claim for losses incurred in returning it to its original condition.
In the current economic climate tenants are increasingly neglecting to maintain commercial properties to a satisfactory standard. If the building is then left in such a condition that it can’t immediately be re-let, it is understandable that landlords will move to minimise their losses.
The cost of dilapidations claims to businesses is dependent on the size, age and location of the commercial property. Claims on prime location offices and retail properties in London can stretch to as much as £2 million, TFT reports. They have also been involved in claims relating to industrial property in Cardiff that have ranged from £30,000 to £500,000.
Obviously dilapidations claims on this scale can have a huge impact on businesses so it’s important that tenants understand the implications of their lease and the commitments it involves. To avoid large claims it is advisable to attend to repair and decoration during the term of the lease or budget to deal with the consequences.
If the tenant is unsure of the level of obligation advice should be sought. Being aware of what is required from the landlord and implementing proper planning can help to avoid these disputes and make the process of lease end less painful for both parties.