Dilapidation Survey

A Schedule of Condition can often form part of the lease agreement and is used to capture documentary evidence of the property’s condition at a point in time, including any existing defects prior to occupation or commencement of works. Without accurate documentation it is difficult retrospectively confirm the original condition of a property, which can give rise to disputes between the landlord and tenant. The Schedule of Condition can reinforce a landlord’s case when in pursuit of reinstatement costs; or alternatively limit the tenants repairing liability. Elvet Property Services can produce an accurate Schedule of Condition on your behalf providing protection to both Landlord and Tenant.

Dilapidation is a term used to reference the works expected of the commercial tenant to reinstate the property back to its original or agreed state prior to the vacating the property.

A Schedule of Dilapidation is the document prepared by the landlord (or their surveyor) listing outstanding reinstatement, repair, legal compliance and decoration items to the property, suggesting remedial works and, in some cases, estimating the cost of the remedial works.

A Quantified Demand is a document setting out further details of the allegations. It is prepared by, or on behalf of, the landlord and is issued after the end of the lease. It will include details of what the landlord considers to be its likely loss as a consequence of the alleged breaches. The loss may be different to the cost of the works that will be in the Schedule of Dilapidation.

A Response is the reply from the tenant (or their surveyor) to the Quantified Demand and/ or the Schedule of Dilapidation. This is usually a letter/email and a Scott Schedule. Upon receipt of the Quantified Demand and/or Schedule of Condition the tenant has approximately 56 days to issue a Response, which will document any dispute.

A Scott Schedule is an extended version of the Schedule of Dilapidation which enables the tenant (or their surveyor) to respond to the content of the Quantified Demand and/ or the Schedule of Dilapidation.

The Dilapidation Protocol is a document published by the Ministry of Justice setting out the courts’ expectations of the landlord and tenant about lease-end dilapidation's. The protocol is available on the Ministry of Justice website.

Alternative Dispute Resolution (ADR) is a formal setting for dispute resolution without involving the courts. It can take various forms and may be a cheaper option to settle a dispute than going through the courts. Forms of ADR suitable for dilapidation's include:

• Expert determination: This means that a single expert makes a decision on the case that is binding on both the landlord and tenant.

• Mediation: This is when the two parties, their advisers and a mediator meet, where the mediator helps to facilitate a mutually acceptable settlement.

• Arbitration: Arbitration is a private form of dispute resolution. It is similar to litigation but is governed by the Arbitration Act. The Arbitrator’s decision is binding on both parties. The negotiation that the surveyors for both parties take part in during a dilapidation's dispute is a form of dispute resolution. The Dilapidation Protocol requires the landlord and tenant to consider ADR. Neither party can be forced to undertake ADR but the court, if the claim goes that far, may expect ADR to have been attempted. Any unreasonable refusal to ADR may be taken into account by the courts when award of costs are considered.