With the emergence of several Commercial Leases being terminated in Northern Ireland over the past number of months, in particular due to the current working restrictions, Dilapidations cases are increasing before the Courts in Northern Ireland. The basic principle of Dilapidations is that a Landlord must be compensated if the Tenant has failed to comply with their repairing obligations under the lease.
If a Commercial Lease has been correctly drafted, there will be several clauses and covenants regarding the obligations the Tenant has to keep the premises in good repair and decorative condition throughout the term. The Lease should also contain covenants detailing the mechanism at end of the term of the Lease, and also particularising the standard sought at vacant possession. Firstly, both Landlords and Tenants should review these obligations, in detail, prior to entering the Lease, and in particular ensure that they are correctly adapted these causes for that specific premises. Of course, by their nature, the Landlord will want these provisions to be as comprehensive as possible, the Tenant, will of course, try to limit their responsibilities and place responsibility back on the landlord. Lease discussions can often break down whilst trying to agree these provisions.
As such, it is generally more sensible to protect all parties, by ensuring that the Lease details the condition of the property prior to commencement of the lease in a Schedule of Condition. At a minimum this should be as detailed as possible and is supported by contemporaneous photographs of the premises. This provides an element of protection to the Tenant ensuring that they are not required to put the premises in any better state of repair than shown in the photographs or described in the Schedule. In recent cases, even further clarity has been given when the parties have instructed a survey of the premises, this provides of course, a detailed expert’s report of the standard of condition at commencement, giving greater certainty and leaves less room for dispute between the parties.
Contentious Dilapidations claims generally arise at the end of a term or under a break clause, the Landlord will serve a Schedule of Dilapidations setting out the alleged breaches in relation to the repair and condition, if they have obtained quantum evidence this will indicate the cost of remedying.
O’Reilly Stewart can assist with any Contentious Dispute that arises through a Dilapidation Claim and can assist with the drafting of the Lease to ensure you are adequately protected, contact our Commercial Team on 02890 321000