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A court decision has emphasised the need for early advice on dilapidations, especially when considering exercising a break in a commercial property lease, says Mark Davies, Director of Building Surveying Services at Worcestershire commercial property consultancy GJS Dillon.

The outcome of the case – Office Depot International (UK) Limited v UBS Asset Management (UK) Limited & others – appears to close down one of the potential options available to tenants who are unsure of their lease dilapidations obligations and want clarity before committing to a programme of remedial works.

Having entered into a 20 year lease of a new building in 2005, in advance of a break date, Office Depot sought from the court a declaration as to what works, if any, it needed to carry out for the property to comply with the dilapidations requirements in its lease.

The court refused to do this because there was no dispute with the landlord as no remedial works had been carried out and the lease had not expired.

Mr Davies says: “It is much more usual, after taking advice from a building surveyor, based on the Schedule of Condition agreed at the start of the lease, for a tenant to carry out what it has been advised are its repairing obligations prior to the expiry of the lease, or to open negotiations with the landlord to offer to pay a sum to meet these obligations, in order to avoid a terminal dilapidations claim.

“Particularly if a lease break is conditional, but before any lease expiry, I recommend that tenants take professional property and legal advice at least 18 months to two years prior.”

Further information from https://gjsdillon.co.uk/services/surveys/