Dilapidations Services – PM+ Chartered Surveyors
At PM+, we provide expert Dilapidations services to both landlords and tenants, helping them manage their lease obligations with confidence. Our experienced RICS Chartered Surveyors are on hand to guide you through every stage of the process, ensuring that all claims are fair, accurate, and in line with UK legal standards.
What Are Dilapidations?
Dilapidations refer to the obligations a tenant or landlord has under the terms of a commercial property lease. These obligations, known as covenants, typically require the tenant to maintain the property in good condition throughout the lease term.
When a lease comes to an end, the landlord will often issue a Schedule of Dilapidations. This document outlines any breaches of the lease covenants, such as damage, disrepair, or a failure to redecorate, which may require the tenant to make repairs or pay compensation.
In some cases, tenants may also issue a counter Schedule if they believe the landlord has failed to meet their own obligations or if they wish to dispute any claims made against them.
Why Are Dilapidations Important?
Dilapidations are crucial for both landlords and tenants to manage financial risk at the end of a lease.
For Landlords: Dilapidations help protect the value of their property investment by ensuring that the property is returned in good condition.
For Tenants: Addressing dilapidations obligations early can help avoid unexpected costs and minimise disruption to business operations when vacating the premises.
Failing to manage dilapidations can result in disputes, legal costs, and financial liabilities for both parties.
At PM+, we provide a full range of Dilapidations services to support both landlords and tenants in achieving a fair and efficient resolution.
Our Process:
Lease Review – We carefully review the lease to understand the specific covenants and obligations of both parties.
Property Inspection – Our Chartered Surveyors conduct a thorough inspection to identify any breaches of covenant.
Schedule Preparation – We prepare a comprehensive Schedule of Dilapidations for negotiation or settlement purposes.
Negotiation & Settlement – Using our extensive knowledge of current case law and market practices, we help clients reach a favourable resolution without unnecessary disputes.
A Dilapidations Liability Assessment is a valuable tool for both landlords and tenants, helping them understand potential financial liabilities before a lease ends.
For Landlords:
A liability assessment provides a clear picture of potential claims, enabling landlords to anticipate repairs and negotiate settlements more effectively.
For Tenants:
Tenants can use a liability assessment to understand their likely financial exposure and plan ahead to reduce costs.
For example, a lease may require the tenant to redecorate the property in the final months of the term. By knowing this in advance, tenants can schedule these works around business activities, reducing operational disruption and avoiding last-minute expenses.
For businesses with commercial leases, dilapidations liabilities can impact financial reporting. At PM+, we prepare FRS 102-compliant Dilapidations Assessments that help businesses manage these liabilities effectively.
Under Financial Reporting Standard 102 (FRS 102), companies can account for future dilapidations liabilities as an operating expense in their profit and loss accounts. This can reduce corporate tax exposure if the following criteria are met:
A Legal Obligation Exists – The business must be bound by a signed lease outlining the tenant’s obligations.
A Past Event Has Triggered the Obligation – This typically refers to the end of the lease term or a requirement to carry out works during the term.
There Is an Economic Transfer of Benefits – It must be demonstrated that the expenditure is necessary to complete reinstatement or repairs in line with the lease obligations.
The Costs Can Be Reliably Estimated – A professional assessment must be conducted to provide a robust and accurate estimate of the likely costs.
Our Chartered Surveyors at PM+ have extensive experience in preparing FRS 102-compliant assessments, ensuring businesses have the necessary documentation for financial reporting and tax purposes.
At PM+, we pride ourselves on delivering high-quality, client-focused Dilapidations services. Our team of RICS Chartered Surveyors offers:
Comprehensive Lease Reviews – Ensuring all obligations are clearly understood.
Detailed Property Inspections – Identifying any breaches of covenant with precision.
Expert Schedule Preparation – Producing accurate and comprehensive Schedules of Dilapidations.
Proven Negotiation Expertise – Achieving the best possible outcomes for our clients, backed by in-depth knowledge of case law and industry standards.
Financial Planning Support – Helping businesses manage dilapidations liabilities for financial reporting and tax planning purposes.
128 City Road, London, EC1V 2NX
info@wearepmplus.com
+44 20 4614 4700
