Commercial lease - dilapidation dispute

Kaz Taylor

Free Member
Jun 7, 2018
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Hi, I am having a problem with my old commercial landlord. Please can you help? (Sorry for the essay!)

In 2012, we took a commercial internal repair only lease for 10 yrs with a 5 yr break clause, on 2 units within a large commercial building. The building had been built 4 years before that but due to recession, it had been mothballed. They completed the build on the communal areas and the 6 units on 1 side of the building, so we took 2 of the units and were the first tenants. More tenants moved in upstairs taking 2 units, 6 months later and 1 other unit was taken in the other side of the building a few months after that. The landlord then lost the property to receivership. The building was sold and new landlord came in 2015.

The new landlord wanted to carve the building up, so that instead of 6 units per side of the 3 storey building, there would be 24 units on each side along with a big fancy reception area created in the middle of the building for a manned reception. This would then allow the offices to be rented out on a serviced basis. Despite all current tenants stating they did not want this to happen, the work went ahead anyway. We submitted numerous complaints of the extensive noise and disruption caused to our peaceful enjoyment over a 6 months period - drilling, hammering, dust, workmen, it was a building site! These were all ignored. In the end, the whole building had been converted to smaller serviced offices, except for our 2 units and the 2 units the tenant above us had.

We served our break clause notice to move out last year. The break clause was accepted and we even paid the full quarter rent, despite only owing 1 month, just to make sure there was no excuse to reject it (so are owed rent back). The landlord instructed the surveyor from the commercial agency who leased to us to come and assess the property 3 weeks before our move out. He did a full report and tried to charge us £750 for this. I argued that it was premature. He shouldn't have been doing the dilapidation report until AFTER we had moved out in order to get a reflection of how the building was actually going to be left, but he came anyway.

It was common knowledge that the landlord intended to carve up our 2 units and turn them in to 8 small serviced offices. Therefore, any work we did in refurbishing the units would be a complete waste of money. We made sure everything was tidy, it was put back to a shell (all internal glass dividing walls were taken down neatly, any paintwork scuffs were touched up etc and the place was professionally cleaned including carpet tiles.)

The landlord went on to completely gut the 2 units as expected, including ripping out the toilet blocks, 2 kitchens, internal walls etc and turned them in to 8 serviced offices with new walls, new flooring & new ceiling tiles (as our ceiling & flooring tiles were destroyed with the refurb they did, - they were immediately ripped out when work men first went in - we have photo evidence of this).

The landlord has since used the dilap report done by the surveyor whilst we were still in occupation to serve us notice that if we don't pay him £19,000 in dilapidations, he will sue us. Despite demonstrating no evidence to reflect the actual condition on move out rather than 3 weeks beforehand - He wants payment for cost of repair, Reinstatement, Cost of decoration & other, preliminaries, RCIS surveyor professional fee @ 10% (commission on works total!?) and money for the survey & negotiation/settelment. Its a total of £20,000!!!!!

I guess I need to know whether the landlord is legally allowed to demand that we refurbish the property (or pay them the cost of refubishment) when he was going to destroy all the work we did by gutting the entire property and carving it up?

thanks in advance!!
 

Kaz Taylor

Free Member
Jun 7, 2018
6
0
Other than being responsible for an internal repair lease, The lease doesn't state anything particularly in this regard as it is quite a unique scenario.
Towards the end of our lease, we sought advice from the solicitor who we appointed when taking the building & he advised at the time that it would be deemed unfair to hold us to any costs for refurbishment when any money we spend would be "frustrated" by the works the landlord then goes on to do. On the solicitors advice, we got our own surveyor involved who agrees with our solicitor and argued the same case, but landlord clearly wants to push for anything he can get. It seems he wants us to pay for his own 8 office refurb!!
 
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kulture

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  • Aug 11, 2007
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    I would suggest that you continue to act on the professional advice of people who have access to the full facts rather than ask on a forum where we cannot read the lease. I would ask them what are the chances of actually being taken to court and what are the chances of loosing. The landlord sounds like a bully and as such is presumably hoping that you give in and offer something to make him go away.
     
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