Report on Dilapidations Claims: Advice for the Big Box Company

This report offers professional advice to the Big Box Company regarding dilapidations claims within the context of a lease agreement. It delves into the definition of dilapidation, emphasizing the importance of understanding lease terms and obligations for both tenants and landlords. The report highlights potential breaches, especially concerning property maintenance, and the significance of a proactive dilapidation strategy. It discusses the complexities of dilapidation claims, the impact of lease duration, and the financial implications of neglecting repair strategies. Key considerations include contractual obligations, the wording of the lease agreement, and the role of surveyors. The report underscores the importance of schedule of conditions, the English Dilapidations Law, and the need for independent surveys to avoid disputes. It emphasizes the need for tenants to understand their repairing covenants and the potential for landlords to seek damages, providing a comprehensive overview of dilapidations claims and strategies for the Big Box Company.

Running head: DILAPIDATIONS CLAIMS 1
DILAPIDATIONS CLAIMS
Student’s name
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Professional advice to the Big Box Company on dilapidations claims
Within the legal context, dilapidation is a term used in reference to the condition of a
building or a premise that is held under a lease. The question that commonly surfaces when one
is asked to give advice on dilapidation is whether a specific premise or building is out of repair
subject to the terms and conditions of the lease alongside the physical state or condition of the
building or premise to which the lease in question refers to and hence whether there is any
breach when it comes to the obligations stipulated in the lease (Shaw, 2015). These very
obligations are not just binding on the part of the tenant alone given the fact that even the
landlords can sometimes be in breach of the obligations stipulated for in the lease agreement
regarding the maintenance of the structure, machinery and plant, external areas or common parts
and to some extent the interior of the premise or demise itself.
This is an important observation given the fact that the landlords in most of the cases are
careless about their obligations such as proper maintenance of the premise. They often transfer
such obligations to the tenants and during the exit time, the landlords demand for such costs from
the tenants something that is a clear breach of the obligations enshrined in such lease agreement.
It is thus proper for the tenants to make sure that they observe or rather implement a clear and
effective dilapidation strategy that will not be burdensome to them when they are to be leaving
the premises they have been occupying for the definite time period enshrined in the lease
agreement. Dilapidation claims can only be made in the event that there has been a violation or
breach either by a tenant or a landlord. It is also important to underscore the fact that such a
dilapidation claim is not only limited to the expiry of the term of the lease term. Sometimes,
dilapidations claims are bound to be very much sophisticated something that comes into play
based on the terms enshrined in the lease agreement and the demands that may be placed by the

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party that is making dilapidation claims. . It is also on record that landlords often prefer longer
leases. At the same time, leases with terms of at least 15 years often end up in substantial
dilapidation liabilities which in some instances may be equivalent to sums that equate to at least
two years yearly rent.
In this respect, it is very crucial to note the fact that tenants are said to to be very much
get concerned with the headline yearly liabilities for instance rent and service charge while at the
same time failing to give adequate consideration to the likes of repair strategies as well as
financial planning which can always give birth to very hefty dilapidations claims from the owner
of the property or landlord. Such a claim may have very severe monetary implications hence
making to be a great shock to most of the clients. It thus clear that most of the tenants often focus
too much on their rent and service charges while ignoring other important aspects of the lease
agreement as far as the maintenance of the property is concerned (McMillan, 2016). This is even
made worse when the lease agreements have longer terms such as ten years and above since such
costs that the tenants always ignore come back to haunt them in the name of dilapidations claims
made by the landlords in the long run. It will thus be important for the tenant who is the Big Box
Company in this regard to make sure that it does not just concentrate on making annual rent and
service charges but also to ensure that the likes of financial planning and repairs so that they do
not allow them to accumulate till the end of the lease term and end up forming serious
dilapidations claims made against them by the landlords.
It is also important to underscore the fact that the landlord or the owner of the property
may not always be out to secure a financial settlement and as such, he or she may prefer the
occupant or the tenant to keep the building repaired and decorated during the entire term of the
lease. This is purposed at making sure that the standards of the building are maintained at all

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times and without any compromises. In circumstances under which a lease agreement is drawing
close to an end, the landlord may always consider the idea that there is no point for the tenant to
be allowed to carry out the works in the event that the successful marketing of the demise will
not surpass the standard requirement under the tenant’s lease agreement. Whatever the purpose
may be, it is significant for both the landlords and the tenants to go for a forward thinking
approach towards dilapidations and at the same time to engage in a discussion regarding the
strategy with their surveyors in a good time before the expiry of the term.
Furthermore, it is important to underscore the fact that when it comes to dilapidations
claims, the contractual obligations of the two parties involved are of great importance. This
makes the attention of such claims to focus on the wording in the lease agreement as well as the
repairing covenant to be specific. The strength of any dilapidation claim is dependent on an
objective interpretation of those particular obligations. This makes the diction that is applied in
the lease under consideration, the specific circumstances regarding the entire lease and by
extension the nature of the premises all of them will be of great importance. This is clarion call
to all the tenants to make sure that they understand each and every word enshrined in the lease
agreement and put their surveyors to task in terms of explaining to them their obligations during
the entire period of the lease. This will make it easy for such tenants to make sure that they
discharge their obligations as far as the lease agreement to avoid any frivolous dilapidations
claims from the landlords (Shaw, 2018).
The terms must be properly understood since any claim must have its roots in the terms
of the lease since this is what the court of law looks at as the primary document that sets into
being any form of dispute. Some of the words that are common in repairing agreements or
covenants include “good tenable repair or to keep the premises repair”. The former since time

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immemorial has been assumed to mean that such repairs as necessary having regard to the
character, age as well as the geographical location of the premises whereas the latter has been
taken to mean that the tenant is under an obligation to put the premises in repair even when the
premises are out of repair at the time at which the lease is granted.
Generally speaking, modernization of the demise, unless where an incident of repair
which can only be performed by replacement of the item with an equivalent that is modern is not
in any way an obligation or requirement under a repairing agreement or covenant. This is most
common in in the context of machinery and plant and unless it is in the real sense in despair or in
violation of any statutory regulation, efforts to inculcate it as an item of repair in a schedule of
dilapidations cannot be in any way be well-founded. It is thus critical for careful consideration to
be given to the diction used in the heads of the terms as well as the repairing covenant given the
fact that every word in the covenant is significant and as such, it should be treated in its own
merit. It is impossible for any repairing covenant to be drafted in such a manner that it covers
every single eventuality of course and at the same time, most of the disputes over the scope or
the degree of the repairing covenants will be dependent on the specific defect in issue (Pinches,
2012). The emphasis is always on that which is reasonable, assessed in an objective manner by
way of making reference to the character and age of the premises or building at the date of the
lease in question. other clauses that are said to be determinative on a dilapidations claims are the
yielding up provisions which are supposed to be precise and clear and operate a sweep-up
clauses without introducing alternative obligations alongside the description of the premises
itself which defines the important scope of the repairing and yielding up provisions.
It is also on record that most of the time, tenants often seek to limit their repairing
liability by way of utilizing a schedule of condition at the beginning of the term to act as

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evidence of the state of repair that the tenant is under an obligation to yield at the premises all the
way to the end of the lease term. The quality of a schedule of condition will always be a
significant factor as well as the comprehensiveness of the information that will have been
recorded as a proof of the state of repair (Sullivan, 2015).
In this respect, it is advisable for the landlord to ensure that a schedule is thoroughly
prepared so as to be able to cut down on the costly and unnecessary disputes in future. In the
event of a lease of an internal area, it can be very significant to record the exact condition of the
premises at the beginning of the lease term (Turley & Sayce, 2015). This will avoid situations in
which the tenant will be required to make repairs that he or she is not responsible for at the
termination of the lease agreement. It is also important to underscore the fact that landlords are
always in the business of burdening the tenants with extra costs when it comes to performing the
various repairs hence the need for such proper measures to be undertaken in terms of
ascertaining the exact repair state of the building prior to relocating into it or commencing its use
depending on the terms of the lease agreement as far as the usage of the property under lease is
being advanced (Webber, 2014).
With a complete repairing and insuring of the lease under consideration, the landlord
should also make sure that he or she considers performing an independent survey for the purpose
of counteracting any prejudicial findings in the survey conducted by the tenant which any
reasonable tenant may only seek to rely upon at the termination of the lease term (Robertson,
2016). Such an undertaking is very imperative since it will make sure that the surveyors of both
the landlord and the tenant are on the same page and that there are no significant variances in
their survey reports that may give birth to some frivolous dilapidations claims at the end of the
lease term (Taggart, 2016).

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At the same time, there are some notable distinctions that are significantly beneficial to
the landlords under the English dilapidations law. This is demonstrated under section 18(1) of
the English Dilapidations Law of the Landlord and Tenant Act of 1927 which limits the quantity
of damages that can be claimed by the landlord as far as the decrease of the landlord’s reversion
is concerned. The major difference is to the effect that there is no statutory protection or even
other statutory limits to any form of diminution in the value on what can be claimed by the
landlord who is the owner of the leased property in this case (Warren & Pittman, 2014).
This particular section of the law was passed for the sole reason of dealing with the
unfairness that was perceived in the cases of the 19th century for instance Joyner v Weeks and as
such, should such a matter qualify to be determined by the Guernsey Court then the principles
enshrined in Section 18(1) may also be consulted or rather be factored in during the
determination of such matters. This is also a clear demonstration to the effect that the law is very
clear to the extent that both the tenant and the landlord are very much protected from every form
of exploitation from each other as far as the filing of dilapidations claims is concerned. Such is
meant to uphold the spirit of fairness in the determination of such matters that are of great public
interest by all standards (Woolhouse, 2013).
In Guernsey, the one and only relevant is that of Bilton Guernsey Ltd v. Allied Maples
Properties Ltd (1994). In this reported case, the Deputy Bailiff avoided the matter, the landlord
having significantly prejudiced his particular claim by way of not having pursued his remedies in
a prompt manner and at the same time having redeveloped the premises prior to the placing of
the claims before a court of law with competent jurisdiction to deal with this particular matter
(Lemmon, 2016).

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If any precise principles can be drawn from this particular landmark judgment is that the
landlord has entitlement to the performance of the covenants that are owed to him or her, that the
loss of the landlord is the actual cost, not hypothetically remedying the violations or breaches
and also that in the event that the landlord chooses not to perform the works but rather conduct
other redevelopment works, then he has not suffered any loss given the fact that the subject
matter of the losses in the real sense no longer existed.
It is thus important to underscore the fact that having a very clear comprehension of what
standard of repair is required by the repairing covenant, a technique for properly managing that
standard of repair all through the term of lease and at the same time adopting a forward thinking
tactic to dilapidations by engaging in discussions concerning the strategy with the advisors in
ample time before the end of the term something that qualifies to be the major concern for not
only tenants but also landlords (Knott, 2002).
It is thus evident from the above-discussion that the dilapidations claims by the landlord
will often derive from the repair covenants by all standards. This is to the effect that in most
cases, the tenants are only concerned with the annual rent and service charges while not being
serious with the obligations of carrying our repairs to the facility so as to make sure that they
maintain the same quality standards of the facility till the end of the lease agreement (Joyce,
2008). It is thus important for the tenants to make sure that they study the lease terms that touch
on the repair of the property so that they do not fail in properly carrying out this particular
obligation since it is the root cause of dilapidations claims.
Recommendations to the Big Box Company
How the Big Box Company can best protect its position whilst fulfilling its legal obligations

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There are various ways or rather techniques that the Big Box Company can put in place
to protect its position against dilapidations claims at the same time fulfilling its legal obligations
under the lease agreement. Such measures are very important given the fact that they make sure
that the landlords do not exploit the tenants during the filing of the dilapidations claims as they
demand exaggerated costs of repairs among others (Humphreys, 2018). As such, the first element
that the tenants need to practice is that of ensuring that all the legal documentation is made
available with the lease plans being put in color for clarity where possible. This is an important
undertaking since it will help the tenants in making sure that they have the legal documents from
which to make reference as what is required of them as far as the leased property is concerned
(Hindle, 1989). This will also make sure that the tenants are not susceptible to additional terms
from the landlord that are not enshrined in the original legal documents that formed the basis of
the lease agreement that will be under consideration during the entire time of the of the lease
period.
Furthermore, it is advisable for the Big Box Company to make sure that they have a
Schedule of Condition in their original format and in colored paragraphs (Gilbert, 2015). This is
equally important since it will act as a clear reference of what the original condition of the
premise was before the lease term commenced. Such an understanding is necessary since it will
keep the tenants from being subjected by the landlords to make the repairs that they were not
responsible for by all standards (Gilbert, 2009). The dilapidations claims should thus be true
reflections of the obligations that the tenants are supposed to perform right from the
commencement of the lease period.
In addition to this, it will be important for the Big Box Company not to contact the
landlord until after professional advice has been sought. This will be to make sure that the

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landlord is not prompted to make adjustments to the original lease agreements that will give him
a leeway to making some reckless dilapidations claims that will be by all standards be a true
reflection of exploiting the clients who are the tenants in this particular case (Firn, Stell, &
Watson, 2010). It will thus be crucial for the tenants to ensure that before contacting the
landlord, they seek professional advice through securing the services of their professional
property surveyor.
Moreover, it will be necessary for the Big Box Company to make sure that he undertakes
the dilapidation works either fully or partly. To this effect, the tenant should consider obtaining
quotes for repair works from the contractors under competitive tender and this is said to be a
powerful negotiating tool (Edwards, Stell, & Firn, 2014). In this case, the tenant should be ready
to vacate the premise early for the repairs to be conducted properly. This will also demand that
the tenant be in the practice of performing routine maintenance of the premise to the very last
day of the lease term. The obvious repairs to the defects which create a poor impression of the
premise should be undertaken at all times (Dowden, 2000). It will also be advisable for the tenant
to take pictures of the premise immediately before the expiry of the lease so as to be able to
demonstrate the state of the property having been vacated. To end with, the tenant should then
return the keys to the representative of the landlord and obtain the proof to this effect.

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