A Guide to Industrial Dilapidation Projects

A Guide to Industrial Dilapidation Projects

Whether you’re the renter or the landlord, keeping a property in pristine condition is in your best interest. For tenants, it means you get your deposit back, which can be dedicated towards a new place once your lease is up, while for the landlord, it means more people potentially interested in being the next one to occupy the space.

But what happens when the property sustains damage while in someone’s care? That’s what dilapidation refers to. What is it, and how does it work in practice? What do dilapidation projects involve? That’s what we’ll be discussing.

What Is Dilapidation?

As a landlord, you are putting a lot of trust into the people you’re renting the property to – and, although it would be ideal, not every person renting your industrial property will leave it in an ideal condition. The good news, however, is that the law is on your side in this regard. The term dilapidation refers to the area of law that involves tenants breaching their lease agreements and covenants. 

 

If you, as a landlord, see that the tenants have significantly physically altered your property despite being told that they shouldn’t, you can file a claim document called a Schedule of Dilapidations. It can be done during the lease agreement or after the lease is no longer active. 

 

How much you can be compensated for it mainly depends on the damage done. There are two main factors that can affect your dilapidation claim. 

 

The first one is the repair cost. Someone called a professional will come to your property and assess the situation. They will then create something called a schedule of dilapidation, which will include all the work that needs to be done to bring the property back to its former condition and how much it will cost. This is usually used when a loss in value is noticed. 

 

Another thing that will affect it is a diminution in value, which is taken into account when the cost of the repair is higher than the loss value of the damage caused. 

 

Keep in mind, however, that there’s a cap on how much you can receive. According to the law, the compensation is capped at the lower cost of the two. However, to get more specific information in this regard, it’s best to contact a legal professional, as it might be different depending on your location.

What Does Dilapidation Mean for the Tenant?

Are you a tenant whose landlord is considering filing a dilapidation claim against and wondering what it means for you? Well, in simple words – financial charges. This could come in two forms. Either your landlord will require you to pay more than the deposit you paid at the beginning of your tenancy (happens when the cost of repairs is higher than the deposit), or they will deduct the adequate number from your security deposit, which is the case when the damages are not that significant and can be covered by it. 

 

In some cases, the landlord might also ask you to bring the property to the state it was in instead of doing so themselves or asking for financial compensation.

What Do Dilapidation Projects Include?

When it comes to what kind of damage can be included in the schedule of dilapidations, the list is quite long. Here are some of the more common examples of things that can be treated as a foundation for the claim and that will need to be done to bring the property back to its former state: 

 

  • Walls: Patching up holes and cracks, replacing damaged drywall, repainting, removal of any wall fixtures installed by the tenant.
  • Floors: Replacement of individual damaged tiles, carpet, or floorboards (or the whole industrial flooring if there’s a need for it).
  • Windows: Replacing damaged frames and broken glass, repair of faulty window mechanisms. 
  • Roof: Replacing damaged tiles, fixing any water damage, leaks, etc. 
  • Ceiling: Patching up cracks and fixing damage caused by water. 
  • Furniture: Replacement or repair of any furniture pieces that were damaged due to improper use or other reasons. 
  • Electrical and hydraulic installations: Fixing broken light fixtures, electrical outlets, toilets, pipes, etc., that got damaged because of misuse. 
  • Deep cleaning: If the property has been brought to a state where regular cleaning is not enough to get rid of the damage and dirt, the landlord might request payment for a professional deep cleaning service.

It’s important to keep in mind that if something was a result of normal wear and tear, then in most cases, dilapidation will not apply. Everything we’ve mentioned applies to a situation where property, whether it’s industrial or residential, has been damaged because of the tenant’s behaviour, especially if it has been done deliberately.

How to Protect Yourself Against Dilapidation?

As a Tenant

Unfortunately, as a tenant, there’s not much you can do to protect yourself if your lease has been going on for a while or has been terminated already. You can contest the dilapidation claim if you think that it’s unfair or negotiate with the landlord to come up with a better solution, but there’s no guarantee that either of those will work. 

 

The protective measures should start before you even officially move your business into the property by documenting its state. Take pictures, and request the landlord to provide you with a document called a ‘schedule of condition,’ which contains a detailed description of the state the property was in before your lease begins (or at the start of it). 

 

If, at any point during your leasing period, you want to introduce some permanent changes to the property, even if it’s just painting the walls, you need to have written permission from your landlord to do so, as it gives you protection. 

 

Finally, you should perform regular industrial space maintenance. The landlord trusted you to take care of the property, and that is, unfortunately, a part of it.

As a Landlord

As a landlord, you can protect yourself, at least in some way, from having to go through the hassle of a dilapidation claim. The first and pretty obvious way to do so is by taking a deposit, which many landlords already do. How much should a deposit be? It depends – in most cases, it would be anywhere from a month to three months’ worth of rent, with some landlords asking as much as a six-month rent. 

 

Just like in the case of the tenant, having a ‘schedule of condition’ written up can be of great help if a tenant will argue that the damage was there when they started using the space. 

 

You can also ask for references during the search process – ideally, the potential tenant’s previous landlords who can vouch for them. 

 

Finally, you can perform regular inspections to ensure that everything is as it should be. We’re not talking about coming every week, but doing an inspection every three or six months (or even once a year if we’re talking about a longer lease) can show you the current condition of your property.

The Bottom Line

As a tenant, you are being trusted to keep the property in the same condition as you got it in, aside from the normal wear and tear that simply cannot be stopped if the space is in use. As a landlord, on the other hand, you are leaving your property in possession of someone else, hoping it will come back to you in the same state it was before. 

 

As you can see, if that doesn’t happen, dilapidation takes care of it. Dilapidation projects can be expensive, but with the right contractor, they don’t have to be. 

 

In need of a paint job before giving back the keys? Or maybe you’re a landlord who wants to prepare the industrial property for the new tenant by painting the walls? Whatever the case, at Anglia Decor, we’ve got you covered. We are experts in dilapidation projects and can help you with bringing the property to its former glory. 


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