Finding the right business premises can be a struggle and when something suitable comes onto the market, it can be tempting to rush in and snap it up. However, commercial property Tenants who do so may come to regret their haste if they later find themselves facing a hefty dilapidations claim!
The fact is that Leases on commercial premises can have onerous terms and conditions in respect of a Tenant’s responsibilities to repair and upkeep the condition of the property, often leaving the Tenant responsible for thousands of pounds worth of repair works when they vacate the premises.
Many Tenants are unaware as to the extent of their potential dilapidations liability and often only find out at the end of their occupation that they are responsible for dilapidations – sometimes including repairs to the building (roof, external fabric, internal areas, external grounds and services), full redecoration (internally and externally), statutory obligations (e.g. provision of an asbestos survey, electrical safety certificates, gas safety certificates, etc.), Landlord’s Surveyor’s fees and Solicitor’s fees, as well as (potentially) loss of rent.
A Chartered Building Surveyor with knowledge of commercial properties and dilapidations claims will be able to alert you to what you will actually become responsible for according to the terms and conditions of the Lease – something that many businesses often don’t fully appreciate.
Steps that should be taken include:
Dilapidations claims can run into thousands of pounds depending on the size of the building and level of disrepair. By taking the advice from a Chartered Building Surveyor and following the precautions detailed above, you can limit your liability significantly.
Also, at the pre-Lease stage, it is advisable that the condition of the building is thoroughly recorded in a Schedule of Condition. A Schedule of Condition is a detailed photographic and written record of the condition of the property at the start of the Lease term that provides protection to an ingoing Tenant by limiting the extent of work that the Landlord is able to include in a dilapidations claim on lease expiry.
We are frequently amazed by the number of Tenants who don’t even take the simple step of having a Schedule of Condition appended to the Lease. Considering the potential dilapidations liability they are taking on under the terms of some Leases, this small and relatively inexpensive step could save them several thousands of pounds when the Lease comes to an end.