Dilapidation Sting

[maria102]

Hello, I've not posted for about erm 7 years, but anyhow. We have recently left our previous shop of 12 years and moved to new premises. We thought we had tied up all the loose ends, left the premises in a tidy, well maintained state and tried to settle our account with the letting agents on departure. What could possibly go wrong? apart from we were completely naive about the subsequent dilapidation charge we were about to be landed with!

We signed a Law Society lease on our solicitors advice and thought this covered us for any hidden charges, however when the letting agents were getting slow to get back to us to pay the balance we started to think there were issues. There was no advice given about the leaving notice procedure and we didn't hear anything from them. We ended up sending the keys back by courier (which is they subsequently then advised us they were charging rent up to the day they were received) and that a property inspection was going to take place. My husband asked if he could be present but they said no, so then we tried to settle again, and then they said they were sending out a surveyor. I know we are sounding completely wet behind the ears now...

Anyway, we have now been landed with a 8.5k dilapidation charge with more tbc charges. The issues are so minor and vague, like a sink plug with a broken chain, a bit of skirting with a dent in etc. No evidence of shutter maintenance (they work fine, in fact I had a new motor fitted) security cameras that need to be removed, a door stop replacing etc. And a charge of £800+ for the report to be prepared. We are completely gobsmacked. The initial lease (we've had four over the 12 years) had a PG on it, but we don't think it was applied to the last two. We've asked for a pre let condition report, photos and a copy of the PG but they have responded that this is ALL our responsibility to provide?!

Clearly they are majorly bluffing, but we're not sure how to respond with the most effective damage limitation. We could either appoint an independent surveyor, and argue to get the charges reduced, let them take us to court and then mediate, or put a full and final settlement to the landlord (they've inadvertently put his name on the docs which they have previously omitted to do). They are such made up charges, it's ridiculous, but I know we should've (but didn't know to, have covered ourselves properly 12 years ago).

Btw the property is now up for let and is advertised with the exit pictures we provided them with, a well maintained blank canvas.

Any advice would be more than welcome before we disappear down the rabbit hole.

 

[obscure]

Btw the property is now up for let and is advertised with the exit pictures we provided them with, a well maintained blank canvas.

Can't help with the dilapidations issue, although much of it sounds like reasonable wear and tear, however, once you have sorted out the dilapidations issue you can make a chunk of the money back by suing them for copyright infringement (using the IPEC - small claims court for Intellectual Property disputes).

 

[lesliedocherty]

We had it years ago, landlord sent a dilapidations report in, we fainted, our surveyor responded, they tossed it back and forward and we agreed on a figure in the middle.

 

[Michael Loveridge]

There is now what's known as a `dilapidations protocol' that sets out the steps to be taken in respct of dilapidations claims - more information here - https://www.dilapidations.net/dilapidations-protocol/

There are two options in the LS lease - either to keep the property in `good and substantial repair', which basically means that you're responsible for all repairs, or to keep it in no worse condition than it was at the outset, in which case a schedule of condition needs to be attached to it as a record of its state of repair at the start of the lease. Which option did you take?

Your solicitor should have advised you - in writing - about your repair liability, as it's probably the most important aspect of the lease - did they do so, and if so did the advice explain the liability correctly?

 

[maria102]

Unfortunately the solicitor didn’t mention anything about it. I’ve just been looking through the lease and this is the clause about the end.

15. when this lease ends the tenant is to:

15.1 Return the property to the landlord leaving in the state and condition in which this lease requires the law to keeps it.

 

[John Hemming]

These things tend to be negotiations. The landlord will often accept a payment. Otherwise it can be a real faff. A surveyor may be a good idea.

 

[maria102]

It’s been back up to let for two weeks and they’ve had viewings. Ironically using our pics we sent to them to prove it was empty and in good repair.

 

[Michael Loveridge]

Clause 4.5.1 of the lease has the two options I mentioned - which of them has been crossed out? This is crucial information.

 

[maria102]

Clause 4.5.1 of the lease has the two options I mentioned - which of them has been crossed out? This is crucial information.

Clause 4 on this is titled 'Use'?

 

[kulture]

There should be a cut and paste sticky in this forum for commercial lease questions.

Go see your solicitor. Take the lease with you. Everything depends on what is written in the lease and no-one here can properly advise you without seeing the entire lease.

Further to the above, how do you know it is a "standard law society lease"? How do you know what has been changed in it before you signed?

Obsure made a cheeky and potentially valid point regarding the IP copyright of your photos. But even that depends. See a solicitor, ask their advice, be prepared to either spend money to defend this or find a compromise solution.

 

[maria102]

There should be a cut and paste sticky in this forum for commercial lease questions.

Go see your solicitor. Take the lease with you. Everything depends on what is written in the lease and no-one here can properly advise you without seeing the entire lease.

Further to the above, how do you know it is a "standard law society lease"? How do you know what has been changed in it before you signed?

Obsure made a cheeky and potentially valid point regarding the IP copyright of your photos. But even that depends. See a solicitor, ask their advice, be prepared to either spend money to defend this or find a compromise solution.

I've already spoken to a solicitor, I was just asking people for previous experiences of this situation. The lease was downloaded as a standard document, so I do know that it hasn't been changed.

Also, neither do I think can you speak on behalf of everybody on here. As regards to a sticky, there isn't a standard answer for this situation as the circumstances are so variable, so people like me value the input of others.

 

[kulture]

I've already spoken to a solicitor, I was just asking people for previous experiences of this situation. The lease was downloaded as a standard document, so I do know that it hasn't been changed.

Also, neither do I think can you speak on behalf of everybody on here. As regards to a sticky, there isn't a standard answer for this situation as the circumstances are so variable, so people like me value the input of others.

Well, if you don't want to listen to advice, why bother posting here.

If you have seen a solicitor who has no doubt read the lease, how do you think people here who have not seen the lease, would know any better. When you say that the original lease was downloaded, how do you know it was downloaded? In a normal commercial property situation the landlord has a solicitor who draws up a lease, and the tenant has a solicitor who goes through it, suggests changes to benefit the tenant and then once agreed the lease is signed. All leases should have the property details, the landlord details and the tenant details. How were these on a standard lease if not edited? Did you use a solicitor when you first leased the property?

 

[maria102]

Well, if you don't want to listen to advice, why bother posting here.

If you have seen a solicitor who has no doubt read the lease, how do you think people here who have not seen the lease, would know any better. When you say that the original lease was downloaded, how do you know it was downloaded? In a normal commercial property situation the landlord has a solicitor who draws up a lease, and the tenant has a solicitor who goes through it, suggests changes to benefit the tenant and then once agreed the lease is signed. All leases should have the property details, the landlord details and the tenant details. How were these on a standard lease if not edited? Did you use a solicitor when you first leased the property?

I do want to listen to advice and experiences, which thankfully I've had both. No interest in a singular opinion with so many presumptions. Read back your posts, patronising at best.

 

[The Byre]

I very much doubt that the lease agreement is a Law Society standard agreement - because -

15. when this lease ends the tenant is to:

15.1 Return the property to the landlord leaving in the state and condition in which this lease requires the law to keeps it.

is not English - at least, not as I know it!

Apart from that minor detail, the basis of dilapidation is simple: a landlord must be compensated if the tenant has breached the agreed obligations set out in a lease.

We do not nor can we know what the agreed obligations are in that lease as we have not (a) read the lease, or (b) seen the property or your and the landlord's schedules of condition before and after the lease period.

It is not uncommon for landlords to assume that they can profit from a delapidations claim.

Section 18(1) of the Landlord and Tenant Act 1927 caps the level of damages that can be claimed. The claim for damages cannot exceed the amount by which the value of the premises is diminished owing to the breach. The act further limits the claim if the landlord plans to redevelop or make substantial alterations to the premises after the lease expires.

 

[ethical PR]

It’s been back up to let for two weeks and they’ve had viewings. Ironically using our pics we sent to them to prove it was empty and in good repair.

Charge them a copyright fee for using your images for commercial use - perhaps the same as the fee they are charging you

 

[Michael Loveridge]

While the criticisms of the poster by both Kulture and The Byre are no doubt well-intentioned, they are quite unfair.

no-one here can properly advise you without seeing the entire lease.

Further to the above, how do you know it is a "standard law society lease"? How do you know what has been changed in it before you signed?

What you don't seem to realise is that the Law Society Business Lease is a standard document. It's printed, so any alterations are immediately apparent.

I very much doubt that the lease agreement is a Law Society standard agreement - because -
maria102 said: ↑
15. when this lease ends the tenant is to:

15.1 Return the property to the landlord leaving in the state and condition in which this lease requires the law to keeps it.
is not English - at least, not as I know it!

It's simply a typo on the part of the poster - it should say "Return the property to the landlord leaving it in the state ... etc" But as I said, it is a standard form document, and that's what clause 15.2 does say.

Clause 4 on this is titled 'Use'?

Yes, sorry, I was looking at the contemporary edition of the LS Business Lease - you're using an old version, which is hardly surprising as it was signed 7 years ago. In that case the relevant clause is clause 6.1.

As you'll see, unless it's been altered by your landlord it only obliges you to maintain the interior of the property (as defined in clause 6) and, if it has one, the shop front. Consequently, any dilapidations to any exterior part of the building are very unlikely to be your responsibility.

Unfortunately, though, as I assume many of the items do relate to the interior and are therefore your responsibility you will probably still need a surveyor to advise you. Make sure you hire one who's experienced in commercial property dilapidations claims.

 

[kulture]

While the criticisms of the poster by both Kulture and The Byre are no doubt well-intentioned, they are quite unfair.


What you don't seem to realise is that the Law Society Business Lease is a standard document. It's printed, so any alterations are immediately apparent.

.

I respectfully disagree. We have no idea how much of the standard Law Society Lease has been changed or deleted before it was signed. So the advice to go see a solicitor and take the actual lease you agreed with you remains.

It remains dangerous to take advice on a commercial lease dispute from anyone who has not read the actual lease.

Whilst the OP here probably has a decent lease, there are some landlords out there who draw up leases more in their favour and tenants have been put in considerable debt as a result.

 

[Michael Loveridge]

I respectfully disagree. We have no idea how much of the standard Law Society Lease has been changed or deleted before it was signed.

I can only repeat that in the vast majority of cases the LS Business Lease is a 6 page printed document. Consequently, any amendments or deletions are immediately obvious, as with any other printed form.

 

[The Byre]

Anybody with a copy of Adobe CS or similar software can change any printed form.

Also - nearly all these forms are PDFs that are downloaded and printed out - and they can be changed like any other text or image document. There are many rather brilliant cases where people have changed what at first sight seem to be 'standard' or company forms to their advantage before signing.

 

[Michael Loveridge]

Obviously, if you work on the assumption that the landlord is deliberately setting out to deceive the tenant then it's no doubt possible to alter what is a standard, Law Society copyrighted document. But that apples to any standard form document.

If the lease is presented to the tenant as being the Law Society Business Lease (which it clearly was in this case) then the tenant is entitled to assume that's what it is, and any alterations to the standard form would have to be specifically agreed to be valid.

 

[The Byre]

I would have thought that signing a contract is an indication of consensus (not that this has any bearing on the OP's dilemma!) Courts tend to be reluctant to make a bad deal good, esp. B2B.

I doubt a contract (standard or torn from the pages of The Beno) has been altered, though perhaps, just perhaps, the landlord is making the most of the situation. The advice to speak to the landlord is probably the best.

 

[mowerman]

Hoping the mods will forgive me for straying a tad off topic.
Many years ago I went through a similar experience as the OP. Bottom line - I had to pay the landlord a substantial amount for dilapidations plus their and my own legal and surveyor costs. The landlord very soon demolished the premises but I couldn't prove that was his intention at the time of settling and by which time 6 years had passed.
Based on their surveyors report the landlords issued a court claim to include the schedule of dilapidations to which they added VAT which I paid. I subsequently discovered that the landlord was not VAT registered.
I queried this and the landlords response was that VAT would have to be paid to whosoever rectified the dilapidations so they were justified in charging it to me. My solicitor concurred with the landlord.
I questioned this with Customs and Excise (prior to becoming HMRC) who basically didn't want to know on the basis that reference to VAT on a court claim did not constitute a VAT invoice which would have been unlawful.
In summary I would suggest that the OP engages a surveyor to minimise the value of each element in the landlords value of the dilapidations and offer 50% in full and final settlement on a part 36 basis. Failing that the OP would be liable for both the landlords and their own surveyors and legal costs which are likely to exceed the costs of dilapidations.