Chartered building surveyors such as those at Bradley-Mason LLP continually expand their knowledge of the most recent government legislation and industry standards, which allows us to help landlords and tenants to remain safe & compliant during occupancy of a commercial property. Certain legislative changes affect the way in which we do our jobs, while others affect your responsibilities and roles as a commercial landlord or tenant. One such piece of legislation is the Dilapidations Protocol, first implemented in January 2012. But what actually is the Dilapidations Protocol, and what does it mean for you? We’ve compiled this short guide to help you find out…
What is the Dilapidations Protocol?
The Dilapidations Protocol is a piece of legislation passed by the Property Litigation Association in January 2012, which has been endorsed by RICS and is now considered to be industry best-practice. The Protocol had been germinating since 2000, however, and has only recently been put into practice. Addressing a commonly cited problem within the industry, the Property Litigation Association identified the need for a process to prevent landlords from making exaggerated dilapidations claims at the end of a lease agreement, leading to the first draft of the Dilapidations Protocol as early as 2002. This first edition of the Protocol was endorsed by RICS at the time, although various amendments suggested by the government worked to put the Dilapidations Protocol on hold for some time. Finally, however, the Protocol was passed, and it is now in effect today.
Why was the Dilapidations Protocol implemented?
There are a number of reasons why the Dilapidations Protocol came about in the first place. For a long time, commercial tenants had been more or less at the mercy of landlords, some of whom took the opportunity to make exorbitant, exaggerated claims at the culmination of a lease agreement. Disreputable landlords would ask for dilapidations settlements far in advance of any losses actually related to repair, maintenance or renovation of a property, and in many cases tenants would have little choice but to meet these demands. Unfortunately, some landlords had realised that their commercial tenants would rather avoid litigation and settle matters out of court without the assistance of a firm such as Bradley-Mason LLP. Often, these tenants had little proof with which to defend themselves against exaggerated claims.
What does the Dilapidations Protocol mean for you?
With the Dilapidations Protocol in effect, the days of exaggerated claims and ‘horse-traded’ dilapidations settlements are behind us. Whilst in reality, the majority of landlords are honest people who wouldn’t dream of exploiting their tenants, the Dilapidations Protocol acts as a safety net for tenants and defends them from such undesirable eventualities. The Dilapidations Protocol now demands clear channels of communication between landlords and tenants, encouraging both parties to disclose pertinent information and co-operate in order to avoid future disagreements. Documentation is now required on behalf of both landlords and tenants, with a schedule of dilapidations due within 56 days of the expiration of your lease. Following the schedule of dilapidations, a landlord’s endorsement is necessary to ensure that both parties are satisfied with the works that are to follow.
The Dilapidations Protocol is a legislative agreement designed to make commercial lease agreements fairer and more straightforward in future, and while it’s a positive step, we understand that it can sometimes appear difficult to follow. Fortunately, we’re here to help. If you’d like to find out more about the Dilapidations Protocol or use our dilapidations surveys to calculate your costs at the end of a lease, don’t hesitate to contact us today.
The Dilapidations Protocol: The Lowdown
As you might expect, it is imperative that both landlords and tenants are kept aware of all industry standards and government legislation during the occupancy of a commercial property. This is made possible thanks to chartered building surveyors such as Bradley-Mason LLP working to stay abreast of what’s going on. Safety and compliance are critical, and any changes in legislation may have serious repercussions on your day-to-day commercial lives. The implementation of the Dilapidations Protocol in 2012 is one such piece of legislation, but what does this actually mean? Find out below…
How it came about
We’ve all heard the stories (or even encountered for ourselves) of disreputable Rigsby-esque landlords taking advantage of their tenants when the time came for them to move out of their properties. After realising that most people would prefer to settle any disagreements out of court, landlords occasionally used this knowledge to demand exorbitant claims at the termination of a lease agreement, knowing that many tenants would prefer to avoid litigation at all costs and were too inexperienced to bring in a firm such as Bradley-Mason LLP. These dilapidations settlements were often far in excess of the actual repair and maintenance work required on the property, with the excess left to line the landlord’s pockets. It was with this in mind that the Dilapidations Protocol was created.
So, just what is the Dilapidations Protocol?
There was talk of the Protocol as far back as 2000, and it was in 2002 that the completion of the first protocol was passed. This earlier version was endorsed by RICS, as is the current incarnation. In short, it is an industry best-practice piece of legislation passed by the Property Litigation Association to prevent landlords from exaggerating dilapidations claims at the end of a lease agreement. However, the full Dilapidations Protocol was only passed – at long last – in January 2012.
The benefits
Of course, the majority of landlords are down-to-earth, trustworthy people who have no desire to cheat their tenants, but now that the Protocol is in place, it acts as a deterrent for the small minority who perhaps retain the intention to practice this way. The major plus is that the communication between both parties is now transparent and open, and the Protocol encourages a free flow of information in order to avoid any conflict further down the line. In fact, specific documentation is now a prerequisite, with a schedule of dilapidations due within 56 days of the expiration of the lease. This allows sufficient time for contesting claims where needed, meaning that exaggerated claims by dishonest landlords can finally be put to bed once and for all.
Commercial leasing can be a time-consuming and stressful affair, and we understand how the red-tape and bureaucracy can be exceptionally overwhelming. Fortunately, the passing of the Dilapidations Protocol was executed to assist everyone involved. Despite this, we know that it can still be a difficult road to traverse alone, and this is where we step in. Do you want to know more about the Dilapidations Protocol or use our dilapidations surveys to calculate your costs at the end of a lease? Give us a call today and we’ll help you through the process, whether you’re a landlord or a tenant.
DISCLAIMER: This article is for general information only and not intended as advice. Each project has its own set of unique circumstances, all potential issues should be investigated by a surveyor on a case by case basis before making any decision.