DILAPIDATIONS  SURVEYORS


The only firm of both valuation and building surveyors negotiating dilaps UK-wide exclusively for tenants of all commercial property types by applying the seldom mentioned, but crucial, ‘statutory cap’
(section 18 (1) of the Landlord & Tenant Act 1927)

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We can agee no win, no fee, or other performance related fee bases.

Alternatively

Fixed fees (as is required by courts in the presentation of expert evidence in litigation).
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Dilapidations

Leases of commercial properties are usually subject to the tenant being responsible for all repairs ("FRi leases").

Vacating at lease expiry entitles your landlord to serve a Schedule of Dilapidations (or "Quantified Demand") detailing the compensation required for (alleged) breaches by you of contractual obligations to repair, redecorate and reinstate alterations. The sum claimed is often huge.

It is a chartered building surveyor who prepares the landlord’s claim, with the outgoing tenant employing a chartered building surveyor to negotiate to a lower settlement figure on their behalf.

But the (section 18) "statutory cap" - landlord’s damages capped to the lower of the cost of the remedial works or the impact of the breaches on the freehold value - is not within a chartered building surveyor’s expertise. This requires a different discipline of chartered surveyor being a chartered valuation surveyor (or "general practice" surveyor), commonly known as a "Valuer".



Applying this Statutory Cap

The law provides that a tenant is not required to pay a landlord any more in compensation than the lower of the proper and reasonable cost of the remedial works, or the amount (if any) of the diminishing impact on freehold value, due to the breached contractual obligations to repair, redecorate and reinstate tenants’ alterations.

Incorporated into statute in 1927, this remains applicable to this day because of the very fact that “cost” and “value” are not necessarily one and the same. Examples in everyday life include the cost of a home extension that did not add the same (or indeed anything) to value; or the value of a brand new car, the day after you bought it. The same principle applies to most “second-hand” commercial properties. 



Which Chartered Surveyor Best Applies this Statutory Cap?

Once your chartered building surveyor has negotiated the costed remedial works to the lowest figure he can, it is then for the chartered valuation surveyor (“Valuer”) to apply the statutory cap.

It is the Valuer’s discipline to research, understand and apply local open market transactions involving similar properties, along with the general experience in applying this specialism nationwide, to persuasively illustrate and argue that certain (or all) of the disrepair items which a building surveyor has to put costs to, are unlikely to impact the freehold value of the property. 



What Will It Cost?

The Internet is full of dilapidations consultancies who offer ‘no win, no fee’ services. But they are using only Chartered Building Surveyors to negotiate on the cost of works.

What if the impact on value is less? That requires a Chartered Valuation Surveyor’s input.

An extra fee and the hassle of finding one.

At dilapsmadesimple.com we uniquely provide the input of both the Chartered Building Surveyor and the Chartered Valuation Surveyor, so ensuring that you are advised and led to the minimum possible settlement figure in your dilapidations disputes.



How Simple?

Dilapidations claims are never well received. Some advisors can make them sound even more complex and more expensive to resolve than they need to be.

We focus on giving concise, informed and complete advice, through our uniquely comprised team of Chartered Building Surveyors, Chartered Valuation Surveyors and Consultant Barrister. We have no conflict inherent in also advising landlords. We only act for tenants; simple.

UK-wide, and Ireland, for all commercial property types. Our CASE STUDIES are testimony to our consistent track record of minimising dilapidations settlement payments.

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Email or phone via CONTACT US to get more on anything from discussing your specific dilapidations situation, to some examples of our phenomenal achievements for blue chip and independent trader clients alike, UK-wide.

More on - Dilapidations

RICS, the governing body of all chartered surveyors, oversees the training, qualification and ongoing professional development of all the many and distinct disciplines of chartered surveyor.

Whilst you may not be aware, these disciplines range from estate agents, antique auctioneers and construction managers, to minerals surveyors, rural/agricultural surveyors and oceanography. All have the generic title “chartered surveyor”, yet involve starkly different specialisms.

Wikipedia actually provides a useful explanation here Chartered Surveyors in the United Kingdom.

In the matter of dilapidations, it is the chartered building surveyor who prepares and “serves” the Schedule of Dilapidations (commonly called the Quantified Demand) – the itemised and costed list of all alleged breaches of repairing, decorating and reinstatement obligations under the existing lease.

It is therefore common for the outgoing tenant to appoint their own chartered building surveyor (either themselves, or through their lawyers) to negotiate to the lowest possible potential settlement figure on their behalf.

But what this common process overlooks, is that the sole piece of legislation in place to protect tenants against inflated settlements (section 18 [1] of the Landlord & Tenant Act 1927), is beyond the remit, or expertise, of the chartered building surveyor.

The chartered building surveyor is specifically trained and qualified in costing remedial works.

But the statutory cap is to the lower of the cost of the remedial works or the impact (if any) the breaches have on diminishing the otherwise full open market value of the landlord’s freehold interest in the property in question.

This assessment, or judgement, can only be made by another of the many types of chartered surveyor, being a chartered valuation surveyor (sometimes also known as a “general practice” surveyor).

Even chartered valuation surveyors (“Valuers”) specialise further, focusing on particular types of property valuation e.g. only residential, only commercial, only for mortgage lending purposes, or only for rental valuation purposes.

Few valuers specialise in section 18 (“diminution”) valuations. It is a complex discipline which, applied by an established specialist, commonly promotes settlement at notably lower than the lowest “cost of works” assessed by the tenant’s chartered building surveyor.

This is primarily because “cost” and “value” are not the same. Hence the very motive for creating the statutory cap back in 1927. 

More on - Applying this Statutory Cap

Section 18 (1) of the Landlord & Tenant Act 1927 provides that:-

Limb 1 states:-

Damages for a breach of covenant or agreement to keep or put premises in repair during the currency of a lease, or to leave or put premises in repair at the termination of a lease, whether such covenant or agreement is expressed or implied, shall in no case exceed the amount (if any) by which the value of the reversion (whether immediate or not) in the premises is diminished owing to the breach of such covenant as aforesaid.”

                            Often referred to as the “First Limb”.

Limb 2 states:-

…and in particular, no damage shall be recovered for a breach of any such covenant or agreement to leave or put the premises in repair at the termination of a lease, if it is shown that the premises, in whatever state of repair they might be, would at or shortly after the termination of the tenancy have been pulled down, or such structural alterations made therein as would render valueless the repairs covered by the covenant or agreement.

                            Often referred to as the “Second Limb”.

In practice, this means that within the knowledge and expertise of the specialist chartered valuation surveyor (Valuer), it might be judged that for your property, whilst many of the claimed works may well be valid according to your building surveyor, some or all will add nothing (or less) to value.

Examples appear in the next section. 

More on - Which Chartered Surveyor Best Applies this Statutory Cap?

        Which of the breaches (repair, redecoration and/or reinstatement) which the chartered building surveyor has had to put a price/cost to, would not be likely to affect the freehold value of the property?

        In spite of what the landlord might say, is the Valuer’s view of the local market that the property is more likely to only sell for significant alteration, or total redevelopment, hence wiping out some or all of the claim?

        If the landlord is also claiming for “Loss of Rent”, does the Valuer’s analysis of the local market for similar properties inform that even if in perfect shape, the property would take at least as long to sell/let as the time required to do the works?

Example scenarios in which costed items accepted by your chartered building surveyor might not in turn affect freehold value in the opinion of the chartered valuation surveyor so as to result in a lower “cap” due to section 18 (1) include:-

        No costed items relevant to value – If market knowledge/evidence shows that the property is likely to be redeveloped/substantially altered.

        Fewer costed items relevant to value – As a general rule, if the property is older, the market expectation as to the standard and presentation is notably less than for the newer/modern equivalent of the same property.

        Fewer costed items relevant to value – If the claim includes works that are simply not relevant to value in the real world. Examples include:-

        > Older industrial units – Whilst your building surveyor has to accept items with significant costs such as repairing dented cladding and painting both steel-work & concrete floors, none is likely to transfer through to more rental/value if done. They might for newer properties, but not older where the value is limited in any event by more significant factors such as low eaves height, having an asbestos roof, poor thermal qualities and/or occupying nearly all of the site.

        > High street shops – With several vacant and superfluous upper floors, whether or not simply in tidy order, or rendered immaculate at considerably greater expense, will have no material impact upon rental/freehold value.

        > Offices – Being only one “tatty” floor in a multi-storey/unit block will not – especially if subject to other vacant parts – have any discernible impact upon the freehold value of the whole thing. Also, because the specification is old/dated, even if in perfect condition, much of the works are likely to be overridden (superseded) by essential upgrade and modernisation works required in order to achieve any re-lettings, or a sale.

There are limitless other possibilities and scenarios where specialist Diminution Valuation (DV) advice of the Valuer can successfully demonstrate that costed items which the building surveyor has to accept because they are breaches, nonetheless have no impact on freehold value and as such, are legitimately removed by virtue of the statutory cap.

See more real world examples at CASE STUDIES    

More on - What Will It Cost?

We can agree no win, no fee, or other performance related fee bases. Alternatively, fixed fees (as is required by courts in the presentation of expert evidence in litigation).

Nationwide Dilapidations Surveyors

Uniquely minimising settlement of dilapidations claims for tenants of all commercial property types by applying the seldom mentioned, but crucial, ‘statutory cap’.
(section 18 [1] of the Landlord & Tenant Act 1927)


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