Dilapidations

Question 1

What must a surveyor not do when acting in a dilapidations claim?

Answer 1

They should not allow their professional standards to be advances to further their clients case. They should not provide a document that contains items that they know or should know are not true, properly sustainable or reasonably arguable - INTEGRITY

Question 2

In the absence of a lease, or an express repairing clause how are the obligations dealt with?

Answer 2

Under common law

Question 3

What are the obligations on a landlord at common law?

Answer 3

• To give full possession at the date of entry
• Once tenant is in possession, not to do anything to prevent possession
• Warrant that the premises is fit for purpose
• Continuing duty to keep premises tenantable, and wind and water tight, once they have been notified of any breaches

Question 4

What are the obligations on a tenant at common law?

Answer 4

• To take possession at the date of entry
• To remain in possession over the course of the lease
• To use the premises for the intention they were let
• To take reasonable care, and to be liable for damage caused through their negligence
• To pay rent

Question 5

How are common law liabilities transferred under a lease?

Answer 5

Mainly, through the repairing obligation. A form of words requiring the tenant to “keep and maintain in a good and substantial condition”. Additionally, the landlord may remove their warranty that the premises is fit for purpose, or that the tenant accepts that premises as being in a tenantable condition

Question 6

Why is an understanding on the common law position important, even when there is a lease in place?

Answer 6

If the lease is silent on something, then it will revert back to the common law position. Therefore having an understanding of what the common law liabilities is important to be able to advise a client

Question 7

What is tacit relocation?

Answer 7

Tacit relocation is where either the landlord or tenant fail to issue adequate notice to quit. In that case, the lease can continue for a year (or less if the lease was less), and all obligations will remain in place

Question 8

What is a dilapidations claim?

Answer 8

The typical process of the allegation of the breach of an obligation under a lease/tenancy, generally in respect of the repair or use. Normally conveyed via a schedule of dilapidations

Question 9

What is diminution in value?

Answer 9

Diminution in value is a measure of loss which has no statutory significance in Scotland. It is a valuation of the difference between a value of a premises in its current condition and the premises under the tenancy

Question 10

What are extraordinary repairs?

Answer 10

Generally defined as extensive or substantial replacement or renewal required as a result of a significant defect caused by the passage of time, natural decay, latent/inherent defects, or an extraordinary event. For a tenant to be liable for extraordinary repairs there needs to be specific terms in the lease (i.e. regardless of the cause of damage)

Question 11

What is an ordinary repair?

Answer 11

An ordinary repair is a repair considered to be within normal repair and maintenance, to ensure wind and watertight or in appropriate condition for the lease obligations

Question 12

What is a schedule of dilapidations?

Answer 12

A document that notes the lease, obligations, alleged breaches, wants of repair (non-monetary)/repair works required, and possibly the estimated/actual cost to carry out the works. Usually prepared by a building surveyor, usually provided in Scott Schedule form to allow for tenant responses against specific breaches

Question 13

What is tenantable condition?

Answer 13

Generally considered to be a condition that takes into account the age, character and locality of the premises and whether it is in a condition where a reasonably minded tenant would be likely to take on a lease of that premises on similar terms

Question 14

What is the definition of a lease?

Answer 14

A lease is a contract where a landlord provides the tenant with the right to occupation of a premises for a period of time, in return for a payment for consideration (i.e. rent)

Question 15

What are the common different types of lease?

Answer 15

• Full repairing and insuring (FRI)

- Internal repairing only (IRI

Question 16

What is a full repairing and insuring lease?

Answer 16

Normally involves the transferrance of all repairing obligations onto the tenant for the period of the lease

Question 17

What is an internal repairing only lease?

Answer 17

Only the repairing obligations for internal fabric of the premises is transferred to the tenant. Often is accompanied by a requirement for pay service charge for common areas

Question 18

What are the four essential ingredients for a lease in Scotland at common law?

Answer 18

• Two parties - landlord and tenant
• Identification of the premises the tenant is to occupy
• Obligation of the tenant to pay rent
• There is an identifiable expiry (the ish)

Question 19

What is required for a successful dilapidations claim?

Answer 19

• A lease in place
• The part relating to the alleges breach is within the premises (as defined by the lease)
• An identifiable breach of obligation which results in a want of repair that causes (or is likely to) the other party to suffer loss

Question 20

Why might a landlord serve a schedule of dilapidations?

Answer 20

• To remind a tenant of their obligations/require a repair during the currency of the lease
• To define work that is required to be carried out prior to lease expiry
• To define breaches to substantiate the wants of repair and pursue a claim for damages for works the tenant has failed to carry out

Question 21

Once instructed to act in a dilapidations claim, what documentation would you expect to review?

Answer 21

• Lease - understand the premises and the obligations contained within it
• Assignations of lease
• Minutes of variation/extension of lease
• License to alter (plus plans/spec)
• Schedule of conditions (appended or referenced)
• Schedules of LL’s fixtures and fittings
• Any planning notices attached to premises
• Plans - defining premises and layout at commencement

Question 22

What clauses in the lease would you expect to take particular consideration of while acting as part of a dilapidations claim?

Answer 22

• Premises (definitions of extent, lease plan)
• Repair
• Decoration
• Alterations/reinstatement
• Yielding up
• Statutory obligations
• Recovery of fees

Question 23

What remedies are available to a landlord?

Answer 23

• Decree of specific implement (during lease only)
• Instigate repair works (only if lease allows, balance of peaceful possession to be considered)
• Terminate lease (by invoking an irritancy clause, legal advice required)
• Claim for damages (lease expiry, should be a measure of loss suffered)

Question 24

Grove Investments v Cape Building - lessons learned?

Answer 24

Payments clauses - if based on VALUE, then measures of loss other than may be considered, included Diminution in Value

Question 25

@SIPP Pensionvs v Insight Travel - lessons learned?

Answer 25

Payment clauses - depending on lease drafting, a payment clause may hold up even if the Landlord has no intention to carry out the works