The Fine Art of Dilapidations

Over the last 35 years, there have been vast changes in how building surveying consultancies such as Trident have dealt with dilapidations. For a long time, it was often the case that surveyors included everything and the kitchen sink in their schedules. This meticulousness led to discrepancies between the views of landlord and tenant surveyors.

Even small claims often resulted in expensive and unnecessary litigation. Much of this was down to the management of expectations. For instance, surveyors would find themselves in difficulty if they made a claim but couldn’t explain what the level of recovery might feasibly be to his client.

Fortunately, the Courts decided that they did not have enough expertise nor did they want to get bogged down into the minutiae of these vast schedules of dilapidations. There were increasing delays in Court proceedings and it could take years to get a hearing date. Moreover, the legal costs often outweighed the claims in any event.

The Civil Procedure Rules, first introduced into the Civil Courts of England and Wales in 1998, were purely developed to encourage the early exchange of information before proceedings with a view to avoiding the Courts entirely or, if litigation was needed that the key points would be addressed at an early stage.

From this developed the Pre-Action Protocol by the Property Litigation Society, which came into effect in 2012. There have been cases about punitive costs for ill conceived claims and this has helped very quickly to change certain aspects of how schedules have been traditionally dealt with.

It could be said that there has been clearer understanding within dilapidations of certain aspects around supersession on provisions of Section 18 (1) of the Landlord and Tenant Act 1927. The truth is, however, that the Protocol itself has been seldom tested in Court.

Regardless, we must stay aware of changes in the field – including alterations to the Red Book, changes to ethical standards and variations arising from devolution. Thankfully, each published legal case provides new ways of addressing dilapidations in the future. These developments keep us on our toes and provide solutions we can use and advance even further.

Years ago, creating Scott Schedules was often a very long and arduous task because the technology simply was not there to quickly make changes to columns of descriptions and costs. Modern technology has helped hugely in how quickly schedules can be prepared and adapted.

Each property, lease and licence will be different in a myriad of ways. For example, in relation to repair alone one should take a five part analytical approach to determine liability. Whilst the obligation to redecorate is more straightforward, there are certain issues to consider here: the matter of reinstatement requires a detailed understanding of many aspects of dilapidations law.

It is for this reason that, despite certain endeavours, it is unlikely that more mechanisation will be introduced into the field of dilapidations, and why I believe dilapidations is best described as an art.

From my experience over the years, here’s my top tips:

1. Make sure you have all the leases and licences and that you’ve read and understood them fully.

2. Don’t generalise or exaggerate. Remember you will have to argue each item later.

3. Fully understand your clients intentions. If works are proposed understand how this effects the dilapidations.

4. Dilapidations is not a fixed thing and will change dependent upon the circumstances. Your client needs to understand his actions are likely to effect any claim.

5. Try and understand the opposition, discuss tactics with your clients to manage their expectations.

Roger Watts, Executive Director

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