The term ‘dilapidations’ refers to a tenant breaching the terms of their lease. This usually relates to changes they may have made to the residential or commercial property, or any damage that they’ve caused to the building or the décor.

Landlords have a right to make a dilapidations claim against the tenant, if they feel that the tenant has broken the lease agreement and left the property in an unacceptable state. Here’s more information about how dilapidations law works, and how landlords can claim.

What exactly is a dilapidations claim?

If a landlord decides to make a claim, they’ll need to have a legal document drafted up – called a Schedule of Dilapidations. This document details exactly how the tenant has breached the terms of their lease and will need to be completed with the help of a solicitor and a surveyor.

Naturally, there’s a conflict of interests right from the start. The landlord want to secure as much compensation as possible, while the tenant will want to avoid paying out. However, it’s worthwhile pursuing for the landlord if there is a genuine case – as the amount which can be claimed can equal over 12 months’ rent.

The importance of the lease

A landlord is far more likely to be successful with your dilapidations claim if the lease is worded effectively. As with any form of legal document, if there are ambiguities, this can cause problems when resolving conflict in the future.

Experts recommend that you make the lease contract your starting point. Ensure the wording is clear, concise, and leaves no room for interpretation. Be aware that there must be some compromise in favour of the tenant, though. For example, tenants might request a ‘schedule of condition’ to be added to the contract. This means the terms won’t require them to leave the property in a better condition than is shown in photographs taken at the start of the lease.

Reasonable wear-and-tear is also regarded as acceptable – but again, this can be interpreted in different ways. Be as explicit as possible, right from the start, about what constitutes wear-and-tear, and what is regarded as actual damage.

If you don’t want your tenant to make any decorative or structural changes to the residential or commercial property, make sure this is also stated clearly in the contract.

The importance of regular inspections

Another way to minimise your chances of having to make a dilapidations claim is to inspect the property regularly. This ensures that any issues are spotted sooner, rather than later – which means there’s less risk of encountering major problems further down the line.

If you’re using a property management company, such as RIB, they’ll usually offer to carry out inspections on your behalf. Be aware, if you want to undertake an inspection in a residential property, you’ll need to provide your tenant with written notice, 24 hours before you visit.

Your tenant has left the property in a bad condition… now what?

If a landlord feels that they are in a position to make a claim against the tenant, there is a specific protocol that needs to be followed, which is as follows:

Surveying the property

Once it is established that the property has been adversely impacted by the tenant’s actions, the landlord will need to hire a surveyor. They’ll carry out an inspection on their behalf, then prepare a document, confirming the property’s condition.

Serving a formal schedule of dilapidations

The official court protocol states that the landlord must serve a schedule of dilapidations within 56 days of the end-date of the lease. This document is prepared by your surveyor, and reflects their findings after they’ve visited the property. It is divided into three main sections: repair, redecoration and reinstatement.

Ideally, the schedule of dilapidations should be served before the lease has ended. In practice, this may be tricky; especially if the tenant  makes things difficult for the landlord as a result.

The tenant’s response

After the tenant receives the schedule, they have 56 days to respond. They may well hire a surveyor to inspect the property too, and it’s a legal requirement to permit this.

Dispute resolution

At this point, it’s recommended that landlord and tenant meet to discuss the situation, along with your surveyors. This should happen within 28 days of the landlord receiving the tenant’s response to the schedule. You’ll also need to consider other forms of dispute resolution – for example, working with a third-party mediator. In many instances, the situation can be resolved at this stage, which is easier than taking the case to court.

Court proceedings

If landlord and tenant are unable to come to an agreement, then it’s time to start court proceedings. You can only do so once all the steps above have been completed, in accordance with the formal protocol.

What’s the likely outcome?

If the case goes to court, the most probable outcome is that the tenant will be asked to pay the costs of the dilapidations, up to a certain point. Be aware; the landlord might not receive the full amount that you originally requested.

FAQs

Is there a limit to the amount a landlord can claim for?

There is – in accordance with section 18 of the Landlord and Tenant Act 1927. This statutory cap prevents landlords from claiming excessive sums from their tenants. As a general rule, the claim is limited to the value difference between the property ‘in repair’ (i.e., in good order) and ‘out of repair’.

What if the tenant won’t reply to the landlord’s schedule of dilapidations?

At this point, the landlord might be forced into starting court proceedings against them. Your solicitor will be able to offer advice on the best course of action to take.

What constitutes ‘reasonable wear-and-tear’?

This is a big ‘grey area’. Generally speaking, minor decorative issues, such as scuffs on the skirting boards, chipped paintwork etc. are regarded as wear-and-tear, and most landlords accept this as part of their responsibility of renting out a property. You should clarify exactly what’s regarded as damage, right from the start.

Can the tenant make the repairs themselves?

Absolutely – if they undertake the repairs to the required standard. Tenants often prefer to do this, as they see it as a more cost-effective resolution to the problem.

If you’re a landlord of residential or commercial property and would like further information on dilapidations or a tenant who wishes to discuss any issues, contact a member of our professional services team today.