More efficient and cost effective management of dilapidations claims for landlords and tenants could result from the launch of a revised Pre-Action Protocol for Dilapidations Claims by the Property Litigation Association on 14 September 2006.
This updates the previous Pre-Action Protocol following consultation with solicitors, RICS and members of the Bar. It is hoped it will be formally adopted by the Department of Constitutional Affairs as a formal pre-action protocol.
The main points to note are:
- The protocol covers the "physical state of commercial property at the end of the lease". This means disrepair, reinstatement and redecoration.
- The Protocol separates the schedule from the claim. The schedule is to set out what the landlord considers are the breaches of the lease, the remedy and the landlord’s costings. The claim is to set out and substantiate the monetary sum the landlord is claiming.
- The schedule should be served within 56 days of the expiry of the lease.
- Where a schedule is served prior to the expiry of the lease, the Protocol requires landlords to confirm at the end of the lease whether the schedule served remains valid and if not serve a new schedule within a reasonable time.
- Section 18 Valuations are not required where the landlord has done all the works.
- Section 18 Valuations are not required at the outset of the claim. Instead the landlord’s surveyor will need to certify in the claim that the overall figure claimed is a fair assessment of the landlord’s loss.
- If a Section 18 Valuation is required it must be served prior to the commencement of Court proceedings.
Although this Pre-Action Protocol has not yet formally been adopted by the DCA failure to comply with its terms may result in costs penalties if litigation is commenced.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
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The original publication date for this article was 22/09/2006.