The Importance of Dilapidation for Commercial Leases

24th January 2018

Within a commercial tenancy agreement, a common requirement of the landlord is that the property is restored to its original condition, prior to being occupied. The need for this is dependent upon multiple factors such as the requirements of the incoming tenant, and whether any changes are made to the property during the leasing period. This is usually outlined in a ‘Schedule of Dilapidation’. As the Royal Institution of Chartered Surveyors states,

“A Schedule of Dilapidations is the document prepared by the landlord (or their surveyor) listing outstanding reinstatement, repair, legal compliance and decoration items to the property, suggesting remedial works and, in some cases, estimating the cost of the remedial works.”

Often when renting property as a business or for commercial use, changes to the interior will evidently need to be carried out. However, on departure of the property, there are important things to consider as a vacating tenant.

Before signing a lease

Prior to signing the contract for the tenancy, associate yourself with the terms and conditions and the effects of dilapidations to the property.

Whilst occupying the property under lease

Before making any alterations to the property consider the likelihood of dilapidations liability, and if future fees fit into your budget. It is likely that your landlord will request restoration of the changes upon the end of the lease.

Towards the end of the lease

Be vigilant of the size of the job of any dilapidation work you have vowed to have complete before the lease end period. If changes to the original property are made during the lease and not reinstated by the end, then the landlord has the right to send a Schedule of Dilapidation that will outline what needs to be restored. This could be sent along with a Quantified Demand that states any additional costs, should the landlord be able to prove that they are at a loss because of the lack of restoration. Although landlords cannot profit from payments for dilapidations, they can hire expensive management companies to carry out the work which could be costly. It is therefore more cost effective to organise the work to be carried out by contractors of your choice before you are required to vacate the property so that you’re in control of comparing quotes that match your budget.

After the lease

Within approximately 56 days after the end of your lease period, if necessary, you should have received a Schedule of Dilapidations and/or a Quantified Demand. The expectation is usually that you must respond within this 56-day period.

What happens if I made changes to the property and a Schedule of Dilapidation is not sent?

Even if your landlord does not send you a Schedule of Dilapidation you may still have potential dilapidations obligations.

GME are an accredited contractor that deal with commercial and domestic dilapidation and restoration, repaints, and priming. Our expertise spans several sectors including education, healthcare, leisure, and retail. To speak to us about any of our services, visit our contact page or call us on 01924 723 723.

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GME Painting Contractors
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