A Tenant will often have an obligation to carry out repairs to the commercial premises. The specialist solicitors in the Dispute Resolution team at Sintons can provide comprehensive, clear and effective advice to both Commercial Landlords and Tenants where it is said that the Tenant has failed to comply with their repairing obligations.
What remedies are available to a landlord where there are items of disrepair?
The most common remedy is for the Landlord to claim damages from the Tenant to cover the reasonable costs of carrying out the repairs together with any loss of rent. Damages may be reduced or may not be recoverable if the Landlord intends to demolish the premises or if the disrepair does not reduce the value of the premises below the costs of repair.
During the term of the lease, the Landlord may be able to take steps to forfeit the lease or enter the premises and carry out the work.
What steps should be taken where there are items of disrepair at the end of the lease?
Both parties are expected to comply with the “Dilapidations Protocol”.
The Protocol is a set of guidelines that has the objective of avoiding the need of court proceedings by encouraging the parties to settle the dispute.
The first step is for the Landlord to prepare a schedule setting out the breaches complained of and what remedial works are necessary. This is often prepared by a surveyor. It should be sent within a “reasonable period of time” after the end of the lease, which is generally said to be 56 days after the end of the lease. A practical tip is to ensure that the lease is reviewed before serving the schedule to ensure that any notice provisions are complied with.
At the same time as sending the schedule, a Qualified Demand ought to be served upon the Tenant. The Qualified Demand will set out the sum of money sought and the timescale for a response from the Tenant.
The second step is for the Tenant to serve their response. There is no specific form that the response should take but the Tenant or the Tenant’s surveyor will usually respond using the Landlord’s schedule. A Tenant should provide their response within a “reasonable period of time”, said to be 56 days after receiving the Landlord’s schedule.
The third step is for the parties to take stock and negotiate. The parties may also wish to consider whether it would be suitable to consider some form of alternative dispute resolution such as mediation.
The fourth step to be taken, if the parties are unable to settle the dispute, is for the Landlord to produce a breakdown of the outstanding issues and a quantification of their losses. The quantification of loss is calculated either by reference to the expenditure to undertake the repair works or by reference to the diminution in value of the premises caused by the items of disrepair. This should be sent by the Landlord to the Tenant before court proceedings are issued.
If court proceedings cannot be avoided then it will be for the Landlord to issue a claim at court.
Our specialist Dispute Resolution team can provide a bespoke service in this regard. For more information about our expertise and how we could help you, please contact us.