One of the key battlegrounds between commercial landlords and tenants is the state and condition of the leased property, especially when the lease ends. When a landlord believes the tenant has not complied with their obligations in the lease, they have the right to pursue damages from the tenant and these claims can often be very significant.
The landlord’s claim is based on the cost of putting the property in the condition it should have been in had the tenant complied with the obligations of the lease. However, the landlord’s right to claim damages for breach of a repairing covenant may be restricted in certain circumstances.
The starting point in any dispute will be the wording in the lease and the specific covenants that apply.
Most, if not all, commercial leases have covenants in place that deal with the required repair and decoration of the property. There are many different types of covenants and significant case law determining what damages may reasonably be recovered by the landlord.
Often, an expert surveyor undertakes an inspection and analysis of the property, and prepares a detailed schedule of the relevant terms in the lease, together with the landlord’s alleged dilapidations. The schedule also lists the damages that the landlord claims the tenant should reasonably pay in accordance with the tenant’s obligations. The tenant then has an opportunity to dispute the landlord’s claim, also by reference to their own expert evidence if they wish.
Dilapidations cases can be complex due to the legal and practical issues that often arise. Instructing a solicitor can help prevent costly delays and mean that the right level of damages is paid.
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