Commercial property landlords are losing money on property repair costs at the end of leases, because they rely too much on Schedule of Condition reports initially prepared by their tenants, rather than taking professional advice from their own chartered surveyor.
Akim Kamangira, Head of Building Consultancy, says that many landlords are not receiving the full dilapidations payments from outgoing tenants, which they need to carry our repairs and refurbishments in order to re-let their commercial property.
He says: “The problem is that incoming tenants generally commission and pay for Schedule of Condition reports at the start of a lease in order to limit their liability for later repairs. Many landlords are too ready to accept their tenant’s building surveyor’s Schedule of Condition without having their own chartered surveyor sign it off. However, they regret it later when they find they are having to pay out themselves for items worn out by the tenant.
“Many Schedule of Condition reports rely too much on photographs, which can fade over, say, 15 years of the lease, without sufficient written description. The photos become almost useless after such a time, making it impossible to ascertain, for example, the state of the carpets at the beginning of the lease, and therefore impossible to prove that the tenant has to pay for new floor coverings.”
The answer, says Akim, is for landlords to ask a building surveyor for a second opinion on the tenant’s report, or to commission their own Schedule of Condition report.
“Accepting a tenant’s Schedule of Condition may save a landlord hundreds of pounds on the initial lease costs, but it could well cost them many thousands in lost dilapidations at the end of the lease,” concludes Akim.
KWB’s qualified building surveyors prepare Schedules of Condition and Dilapidations reports for commercial property landlords and tenants. and have many years’ experience negotiating and advising clients on dilapidations claims ranging from £2,000 to multi-millions of pounds.