Dilapidations

Commercial Tenants are usually under contractual obligations through repairing covenants under the Lease they have signed and, in any event, may be under statutory obligations to repair and make good a property on yielding up.  This gives rise to disputes where Landlords and Commercial Tenants disagree on the extent of repairs required and who is responsible for the repairs being undertaken.  We are here to provide clarity as to where you stand in those circumstances.

Common breaches of covenant that we advise on include:

• Breach of Repairing Covenants
• Breach of Decorating Covenants
• Breach of Covenant to comply with a specific statute
• Breach of Covenant to Yield Up and any related obligations in which the Tenant is required to leave the property in a specific state of repair at the end of the term
• Reinstatement requirements that relate to alterations made by the Tenant

The type of issues that we advise on often involve obligations set out in a Lease, but obligations are also present in ancillary documentation, such as Schedules of Conditions, Licences to Alter or Deeds of Variation.

The remedies available to a Landlord will depend on the specific circumstances of the Lease and whether or not the term has expired.  Certain statutory restrictions on the Landlord’s remedies exist for breach of covenant.  There may also be practical considerations for Landlords to consider when taking enforcement action.  These will include:

• Establishing the extent of any breach including conditions on the Landlord having access to the property, the appointment of a surveyor and then the Landlord revisiting the property (as soon as possible after the expiration of the term) to see the work that has been done
• Dealing with a Commercial Tenant that does not respond to a request for access and whether or not this in itself is a breach of covenant
• Consideration as to what amounts to a “reasonable time” for the Commercial Tenant to make repairs
• Any delays that may be caused by compliance with the relevant Pre Action Protocol
• The recoverability of legal and other costs under the Lease
• Issuing of reinstatement notices (and timing of the same) in respect of Commercial Tenant alterations

Our clients includes substantial real estate Funds, sophisticated Landlords with large property portfolios, Developers and Commercial Tenants including retail, restaurant and leisure chains.

Our expert team are hugely experienced in advising Commercial Landlords and Commercial Tenants on dilapidation process, responsibilities and disputes.  We provide pragmatic advice to enable you to make sound business decisions and achieve the best outcome possible.

If you are a Commercial Landlord or Commercial Tenant facing a dilapidations issue, get in touch and we will be happy to assist you.