At the end of a commercial lease there is almost always a requirement to decorate or repair a building.
Even if you have been the most careful of tenants, you will have caused wear and tear or made alterations during your time in occupation.
Despite looking after the premises, some services such as lifts, air conditioning and other plant and machinery, are likely to be less fit for purpose.
In this situation, the terms of the lease are critical in determining who pays for such ‘remediation’ work – you, or the landlord.
If you are contemplating a cash settlement, or implementing the works yourself, then you should employ a surveyor to check your liability, ensure works will meet the right standard, and estimate the cost of the works.
Under Section 18 of the Landlord and Tenant Act 1927, there is a limit on what your landlord can claim by way of dilapidations.
In the case of repair, your landlord’s claim is limited to diminution in value caused by the disrepair. In an extreme case, where your landlord intends to demolish the building, that may mean the claim value is zero.
The test under Section 18 is the landlord’s loss. This is a complex and skilled valuation in which a surveyor needs to understand statute and case law.
Which items of claim can be substantiated and what is their affect on value? It is rarely as simple as cost-equals-value. Your surveyor needs to understand not only repair and building defects, costs and law, but be able to marry this with detailed market knowledge, to demonstrate the affect on the property’s value.
You are also likely to have a responsibility to reinstate the premises, where alterations have been made, and to redecorate. Both fall outside the provisions of the 1927 Act.
Our Section 18 valuation surveyors have extensive experience acting for tenants / occupiers, including attendance at mediation and Court proceedings.
To ensure the best possible outcome, it is important to engage a professional team as early as possible, so that a coordinated and strategic approach can be taken.
