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Commercial Property – Taking a Proactive Approach to Limit dilapidations Claims

When you take up a tenancy at a commercial property, it is highly unlikely that you will be thinking about a time in the future when you will exit the lease or vacate the property. Yet this is exactly the mindset that may well serve you best!

Being proactive as a tenant and thinking of your exit may well help to limit lease end liabilities, saving thousands of pounds in the process.

Here are the steps you can take to adopt a proactive stance at the various stages of the process of taking on a commercial lease.

Before signing a new lease

Taking on a commercial property lease doesn’t just give you somewhere to base your business, it also comes with a whole host of repair obligations. A detailed Schedule of Condition that has been prepared by a chartered Surveyor with experience in this area will give you a solid piece of evidence to refer to in the future.

Pre-Lease Surveys can also be useful in providing an overall assessment of the condition of the premises, along with the costs to remedy any defects. This report can be used as a tool to renegotiate with the landlord, or at least see that any issues are addressed prior to the commencement of the lease and therefore falling outside of your repair obligations.   

It is also vital to understand you repair obligations from the off. A commercial property solicitor will be able to review the lease you have been furnished with prior to finalising the deal, giving the opportunity to clarify any points or make any amendments where obligations are too onerous.

During the term

Although much focus is on the end leases as a time when dilapidations claims can be issued against tenants, it shouldn’t be overlooked that this can actually happen at any stage during the lease term.  Taking a proactive approach and addressing any issues as they become apparent – rather than leaving them to worsen – will often stand you in good stead.

In any event, if you plan on leaving a premises at the end of the lease, you should begin preparing for your exit and calculating your potential dilapidations liability around 12 – 18 months in advance.

When approaching the end of the term

If you have followed the above advice during the term of the lease, you should find yourself in a strong position when it comes to exiting the property, with only minimal liability in terms of a dilapidations claim.

However, if you have overlooked property maintenance and repair throughout the term of the lease, you might expect to receive a significant bill from your landlord in the form of a dilapidations schedule and claim. This can be the point at which commercial property tenants first engage with a Chartered Surveyor – to seek advice and try and negotiate the claim. Our team are able to assist by entering into negotiations with the landlord’s surveyor whereafter we will compile a formal response to the claim. Our Chartered Surveyors are experienced in the negotiation of dilapidations claims and will employ all the tools at our disposal to defend a tenant and limit their liabilities.

For more information on dilapidations claims, including how to take a proactive approach and minimise them, or else to engage our services to defend a claim you have received, please get in touch with us.

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“We had a Schedule of Condition carried out on a Commercial Property. From vacant possession to our proposed completion date we were really tight on time. Gary managed to carry out the inspection and write a very thorough report in the time needed to ensure we hit our completion date. The price of the report was also extremely competitive. I would recommend Lea Hough to anyone looking for a Professional Surveyors with excellent service & communication at a competitive price.”

Danny Ambler - Fuse Contract Furniture, Blackburn