Dilapidations represent the expenses that a tenant must bear upon the conclusion of a Healthcare commercial lease in London. They are essentially the costs of vacating the property. In some cases, a healthcare tenant may receive an interim schedule of dilapidations during the lease. These costs are related to restoring the property to its original state before the lease, including any repair work or cosmetic alterations. The landlord serves the tenant with a schedule of dilapidations. This can often be an unpleasant surprise, and disputes may arise.
The schedule of dilapidations is a legal document that empowers landlords to make a clear and concise dilapidation claim against their tenants. It lays out the tenant's obligations about returning the property to its original condition and restoring any alterations made during the lease term. The schedule of dilapidations provides a detailed breakdown of the work required to be done, as well as the estimated cost of carrying out said work. It is important to note that the quoted cost may not necessarily reflect the actual cost of settling the claim. Nevertheless, receiving a schedule of dilapidations can be a significant financial burden for the tenant.
A healthcare landlord has the right to make a dilapidation claim at any point during the lease, but it is typically done once the lease has ended or is about to end. The landlord has a maximum of six years from the end of the lease to make a claim, although it is recommended by the Dilapidations Protocol that the claim be made within 56 days of the lease's end. In rare cases, a dilapidation claim may be made during the lease, such as when there is a statutory lease renewal or a break clause, or when the property's disrepair is affecting its value.
Landlords have four potential remedies at their disposal to deal with disrepair issues. The most suitable option will depend on the specific circumstances and repairs required. These remedies include: seeking monetary damages to compensate for the disrepair, requesting specific performance from the tenant to carry out necessary repairs, terminating the lease through forfeiture if it has been breached (which must be clearly outlined in the lease), or exercising the explicit right to enter the premises during the lease term to carry out repairs and recover costs from the tenant. Landlords must take decisive action to ensure that their property is maintained to an acceptable standard, and these remedies provide the necessary tools to do so.
As a tenant, you have three clear options: agree to the repairs outlined in the schedule and pay the compensation, agree to the repairs and undertake them yourselves, or dispute the claim outright. If you opt for the latter, you must seek advice from a Chartered Building Surveyor with expertise in dilapidations. They will conduct a thorough review of the lease documentation, scrutinize the landlord's schedule, and provide you with strategic guidance on the process.
During negotiations, both parties should make a concerted effort to reach a mutually acceptable resolution. However, if no agreement can be reached, you have two choices: utilize an alternative dispute resolution service or commence court proceedings. Rest assured, there is no room for ambiguity or hesitation in this matter.
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