Why Do Dilapidations Matter To Commercial Property Landlords?

As a commercial property landlord, it is important to understand what you can reasonably claim for at the end of the lease. This is why dilapidations are so important to commercial property landlords. By understanding what you can claim for, you can better manage the process. You will also be able to avoid disputes by ensuing your asset and income is protected.

So, in this blog post our commercial property dilapidation solicitors share why dilapidations should matter to landlords and what they can, and can’t, claim for.

Why Should Dilapidations Matter To Commercial Property Landlords?

Dilapidations will have a material effect on the profitability of the lease. They will also negatively affect your ability to start a new lease with a new tenant. Being the landlord of a dilapidated property will delay the re-letting or sale of your commercial property. It will also reduce the market value or the property or reduce the potential rental income. You may find that the property becomes unfit or even unlawful to re-let. This will fall on you, as the landlord, to cover the expense of repairing costs.

However, if dilapidations are properly managed, these costs will fall to the tenant. In turn, this will help improve the long-term financial performance of the commercial property. This is something that our specialist commercial property dilapidation solicitors can help landlords with.

What Can Commercial Property Landlords Claim For?

The real answer to this question can be found in the commercial property lease. The lease will set out what the tenant can and can’t do. It will also state what they can and can’t be held responsible for. Generally speaking, as a commercial property landlord you are able to claim for the reasonable cost of repairs or reinstatement works that are required to bring the property back to condition stated in the lease.

However, there are limits to this. The Landlord and Tenant Act 1927 prevent landlords from recovering more than the actual loss in value caused by the disrepair. This means that you can’t claim the full costs of repairs if doing the work would not increase the value of the property. It is also not possible to claim for improvements, only for works that are needed to meet the terms of the lease.

This is why it is so important that as a landlord you speak to a commercial property dilapidations legal specialist. If the claim isn’t straight forward, you can fall into very murky waters. However, our commercial property solicitors can help you avoid this by properly drafting, reviewing and negotiating your commercial property lease.