Dilapidations represent one of the most common causes of dispute between commercial landlords and tenants. From a legal perspective, fall-outs of this type can be complex, and so strong and effective legal representation is essential. There are various procedures in place for this area of law, and so it is also important both landlords and tenants are in compliance with these. Dilapidation disputes can occur in many different buildings, from single, small shops to large warehouse complexes. Prior to the commencement of proceedings, there is a set procedure which the court expects the parties to follow known as the pre-action protocol. In this article, schedule of dilapidations protocol, we take a look at the process and mechanism involved.
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What is the process involved in dealing with a dilapidations claim?
In order to protect both the tenant and landlord in the event of a dilapidations dispute and to ensure the claim is successful, a strict process needs to be adhered to, which needs to be followed exactly in order for a dilapidations claim to be successful.
Pre-Action Protocol
Prior to proceedings, there is a set procedure that the court expects the parties involved to follow. This is the ‘Claims to Damages in Relation to the Physical State of Commercial Property at Termination of a Tenancy.’ It also sets out a timetable and creates a channel for the exchange of information during the process. Both parties must comply with the Protocol, irrespective of either party seeking professional advice or not.
Evidence of compliance is important as sanctions can be placed if the court deems either party has not done so. This typically takes the form of a cost order
Schedule of Dilapidations
To start the process, the landlord is required to send what is known as a Schedule of Dilapidations to the tenant. This document sets out the breaches and the work required to rectify any issues with the property and the likely cost of this. As per the Protocol, this should be served in a reasonable time frame post-tenancy. It is suggested that this is sent electronically to allow the tenant to reply.
A Quantified Demand
Alongside any Schedule, the landlord must also send a Quantified Demand within the same reasonable time frame. This needs to set out all of the particulars of the claim, specifically the monetary damages that may be sought as a result of the breach of any obligations. This should be a sum that quantifies the overall loss for the landlord, not necessarily the sum of repairs. It can be inclusive, for example, of the loss of rent in the period following the tenancy in order to conduct repairs.
Tenant Response
Any response from the tenant needs to occur within the same reasonable timeframe following the receipt of the Schedule and Quantified Demand. The response should detail the tenant’s position in a clear and concise manner, but it does not have to address every point made in the documents that they receive within the Quantified Demand. However, it would be ideal in order to establish the true issues between tenant and landlord in the dispute.
The Pre-Action Protocol suggests a meeting between the two parties in the 28 day period after the tenant’s response. At this meeting the parties should agree to as many of the items being disputed as possible, in order to narrow down the issues and come to a reasonable resolution.
Alternative Dispute Resolution
Both parties must consider whether or not a form of Alternative Dispute Resolution is suitable before taking the matter further. If the issue does progress to litigation, then both parties must show evidence that ADR was reasonably considered.
Litigation should be considered a last resort and compliance with the Protocol will be thoroughly assessed before any costs are awarded.
If the actions taken under the Protocol have not resolved all issues, then legal proceedings will begin.
How we can help
We have a proven track record of dealing with and advising upon dilapidation disputes. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact Our Commercial Litigation Solicitors
It is important for you to be well informed about the issues and possible implications of a dilapidation claim. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Commercial litigation solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
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