PRESS RELEASE

6 March 2018

DIY APPROACH CAN SAVE AS MUCH AS 50%

ON END OF LEASE DILAPIDATION COSTS

Commercial property tenants can save as much as 50% on dilapidation costs at the end of their leases by doing the repair and refurbishment work themselves, rather than reaching a financial settlement with their landlords, according to a leading Birmingham office fit-out and project management specialist.

Adrian Southall, director of KWB Workplace, the consultancy arm of Birmingham commercial property agency KWB, says that by appointing an independent expert to review the necessary work and appoint contractors, occupiers can save themselves many thousands of pounds.

“The dilapidations bill for tenants to repair, reinstate and decorate their premises at the end of a lease can run into hundreds of thousands of pounds, even if they have a Schedule of Condition which documents the state of the premises when the lease started. It’s often unexpected as well, as tenants are focussing on their new premises,” explains Mr Southall. 

According to Mr Southall, many tenants do not realise that landlords’ bills can be challenged and reduced by a building surveyor, and that with a bit of planning even bigger reductions can be made by undertaking the work themselves.

He says: “We have saved clients well over 50% on the initial demand made for dilapidations by landlords, by carrying out our own surveys and taking on independent contractors to carry out the necessary work, rather than making a financial settlement with the landlord. 

“An independent survey will often reveal that the tenant has actually carried out improvements which the landlords’ surveyors have asked to be removed.  One such example was the installation of an air conditioning system which enhanced an office, for which the proposed bill to remove, as part of the dilapidations, was £40,000.  We successfully argued that this was a betterment to the premises, that the air conditioning system should be left intact and that there should be no payment for this.

“We also consistently find that the quotes we get from contractors to carry our repair work are significantly lower than those supplied by the landlord.  Appointing an independent consultant to oversee this process, reduces management time and cost and can result in substantial savings.”

Mr Southall warns that it is very important that tenants have a Schedule of Condition in place before commencing a new lease.

He says: “This will help save money at the end of the lease as a Schedule of Condition ensures that the tenant is liable only for alterations and damage caused by them.  Without a Schedule of Condition, the landlord can claim that the tenant is liable to pay for all repairs to the premises at the end of lease, even if they were not responsible for them.”

Further information about tackling dilapidations bills and appointing an independent expert is available from Adrian Southall at KWB Workplace on tel. 0121 233 2330 or email asouthall@kwbworkplace.com or from www.kwboffice.com/property-services/investors-developers/building-surveying/dilapidations

With offices in Birmingham and Solihull, KWB is an independent firm of Chartered Surveyors which offers a comprehensive commercial property service and unrivalled market knowledge across the West Midlands.  KWB has been trading for more than 25 years and its senior management team has in excess of 200 years combined professional experience.

Picture caption: Adrian Southall