A dilapidation survey is an inspection carried out on a commercial property, usually towards the end of a lease term. It identifies any disrepair or damage that occurred during the tenancy, providing a schedule of dilapidations for the tenant to remedy before handing the property back to the landlord.
Local dilapidation surveyors like Tim Greenwood and Associates will follow the standard approach of requesting all relevant dilapidation documentation from the commercial landlord to ensure that the schedule of dilapidations is an accurate reflection of the tenant’s lease obligations.
Why Have a Dilapidation Survey?
There are several key reasons for landlords to undertake a dilapidation survey:
- Identify disrepair early to maintain property value
- Highlight tenant liability under the lease
- Ensure the property can be re-let quickly
- Allow for budgeting of required works
Tenants benefit from understanding potential liabilities early on. Ultimately, dilapidation surveys provide reassurance for both parties.
Required Dilapidation Survey Documents
Documents that are typically required include:-
- The lease between the landlord and the tenant
- Other leases or subleases relevant to the tenant’s occupation and referenced within the lease between the landlord and tenant
- Schedules of condition prepared at the lease commencement, referenced within the main lease.
- Licences for alterations for works proposed to be undertaken by the tenant during the lease terms.
- Other documentation which may be relevant to the tenant’s occupation impacts the tenant’s reinstatement, repairing and redecorating obligations during their occupation.
When To Schedule A Dilapidation Survey
Surveys are usually carried out 6-12 months before lease expiry, giving tenants time to remedy issues. They can also be done anytime during the lease if the landlord has concerns.
Landlords should diary dates in advance. Tenants must provide access under most commercial leases.
What’s Checked In A Dilapidation Survey?
When preparing the schedule of dilapidations, a commercial surveyor will need to undertake a survey of the property and assess the implications of lease liabilities. Any breaches must be clearly identified and reported, with remediations and costs required.
The survey checklist covers:
- External elements – roof, windows, doors, drainage etc.
- Internal elements – walls, floors, ceiling, fittings etc.
- Services – plumbing, electrics, heating etc.
- External areas – gardens, car parks etc.
The surveyor identifies disrepair caused by the tenant’s failure to maintain the property under the lease. Photographic evidence supports the dilapidation schedule.
The surveyor advises whether issues should be remedied onsite or through financial compensation. Tenants typically must remedy most items before the lease ends.
Appointing A Dilapidation Surveyor
Surveys should be conducted by qualified chartered surveyors experienced in this field, carrying out inspections in line with industry guidance.
Appointing an independent surveyor provides a fair assessment. Landlords and tenants can each appoint their own surveyor if required.
While landlords initially bear the survey cost, this can often be passed on to tenants under the lease terms.
It’s crucial that the commercial dilapidation surveyor preparing the schedule of dilapidations is provided with all relevant documentation to ensure the claim is accurate and fair. Should the lease details or supporting documents be unavailable or insufficient, it’s widely recommended that tenants provide copies so that the landlord’s surveyor can prepare the claim accordingly.
FAQs
How long are dilapidation reports valid?
Reports detail the property’s condition at that time. Tenants remain liable for further disrepair until the lease expires, so follow-up surveys are recommended.
What if the tenant disagrees with the findings?
Both parties must act reasonably. Tenants can request a second opinion and negotiate a settlement, avoiding court action.
What happens if dilapidations are ignored?
The landlord can pursue legal action to recover repair costs and lost rental income from the property being unlettable.
Who manages dilapidation works?