You are the Judge – schedule of dilapidations conflict

 

If you are leasing a property the landlord will usually(!) want to protect their investment. Often this will mean having a schedule of dilapidations, which outlines how the property should either be maintained or left.

Are these clear? Are they fair and can they be amended?

Schedule of dilapidations for a cafe

The scenario

In 2009, Timothy and Sarah opened a small café in a converted corner shop. It was so successful that at the end of their lease they decided to move to larger premises.

Their former landlord’s surveyor has now sent them a schedule of dilapidations, claiming that in accordance with the terms of their lease they should have returned the café to its former state.

The couple are surprised about this. They had believed that their landlord intended to run the café himself after they left, and had also spent a considerable amount of money stripping out their personalised elements and repairing the wear and tear to the building.

They want to avoid court proceedings, however, and have agreed to mediation.

What would be a fair outcome of this case? Do you have license to do what you want to a property?

The answer:

The Pre-Action Protocol on dilapidations disputes specifies that the schedule should be endorsed by the surveyor, confirming that they have taken full account of the landlord’s intentions for the property.

In this case, it may be that the surveyor was misinformed about the landlord’s intentions. If he does indeed intend to continue running a café, it makes little sense to turn the building back into a shop, and the reinstatement works should only go so far as necessary to allow him to make the changes he wants.

However, if instead it is the couple who are mistaken about the landlord’s intentions, then unless their lease says differently they can be compelled to reinstate the original shop fittings. Of course, the mediator should try to ensure to take account of how the misunderstanding arose, especially if it was due to the landlord’s conduct.

It's all in the detail - so be careful if you're in a similar situation.

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