Latest news and Articles

“Dilapidations” is the term used to describe items of disrepair that are covered by the tenant’s repairing and/or decorating covenants contained in a lease. A landlord of commercial premises may have a claim for damages against a tenant on the expiry of a lease if the tenant is in breach of the tenant’s repairing and/or decorating covenants. 

From 2002 up to the end of 2011 it was considered best practice for landlords and tenants to follow the Property Litigation Association’s Pre-Action Protocol for Terminal Dilapidations Claims for Damages (“PLA’s Protocol”).  The PLA’s Protocol  also tried to assist the parties avoid litigation by encouraging early settlement of disputes between the landlord and tenant over breaches of the tenant’s repairing and/or decorating covenants. The PLA’s Protocol provided that a surveyor instructed by the landlord should provide an endorsement confirming the extent of the works required to put right damage/disrepair caused by the tenant and state how much those works would cost.  However, there would be no real consequences for parties who failed to follow the PLA’s Protocol before a dilapidations claim was issued.

As of 1 January 2012, the Pre-Action Protocol for Dilapidations Claims has formal status under the Civil Procedure Rules 1998 (“CPR”).  This Protocol is, in essence, similar to the PLA’s Protocol, but with a few significant changes.  There are new definitions to get to grips with, for example, “landlord’s claim” becomes “Quantified Demand” and “serve” is changed to “send”.

• The landlord’s endorsement previously required under the PLA’s Protocol (and mentioned above) must now confirm that:
• The works set out are reasonably required in order to remedy the tenant’s breaches of repairing and/or decorating covenants;
• The landlord’s intentions for the property at the end of the lease are fully taken into account; and
• The costs of the remedial works are reasonable.

Another major change is that the tenant’s surveyor is now required to provide an endorsement confirming that:

• The works set out in the tenant’s response are all that are reasonably required for the tenant to remedy the alleged breaches of the covenants contained in the lease;
• The costs set out in the response are reasonable; and
• The tenant (or his surveyor) has taken into account the landlord’s intentions for the property at the end of the lease.

Usually the courts will order costs sanctions against defaulting parties for failure to follow Pre-Action Protocols.  Given the potentially significant financial impact on a defaulting party, it is imperative that both landlords and tenants are aware of the importance of following the new Dilapidations Protocol before proceeding with litigation.

Ellen Gallagher
Solicitor