A Schedule of dilapidations will identify the wants of repair, including decorations, of leasehold premises in relation to the repairing obligations under the terms of the lease. It may be prepared for service on the landlord or tenant, depending on their respective lease obligations.
Schedule of Dilapidations - Interim
Schedule of Dilapidations - Terminal
The terminal Schedule of dilapidations will identify the wants of repair, including decorations and reinstatement, of a leasehold property in relation to the repairing obligations under the terms of the lease. The schedule is prepared for service on the tenant by the landlord prior to the termination of the lease. The inspection of the property will identify all wants of repair, decoration and reinstatement which are collated into a terminal schedule of dilapidations.
Licence for Alterations
A licence is a form of permission, a legally enforceable document, which is granted by a landlord to a tenant enabling the latter to exercise a right within a formal lease agreement. Licences for alteration are most often used where a tenant seeks the landlords formal approval to carry out alterations, fitting-out works and similar within the demised premises.
Assessment of Dilapidation Liabilities for Accountancy Purposes
Normal terms and conditions of a commercial lease usually impose on the tenant the obligation to return the property to a stated condition. This can be as the building was at the commencement of the lease, in other cases it may require reinstatement to a fully repaired condition. Some leases provide for a cash payment as an alternative to carrying out works. This is known as ‘dilapidations’. For accountancy purposes dilapidations liabilities should be accurately assessed and accrued. They should be sufficiently accurate, reliable and periodically re-assessed to ensure that they are keeping pace with changing costs and the condition of the premises.
We can advise on the level of dilapidations costs attached to your property. We can identify liabilities in advance to help you budget for repair and maintenance works and to help avoid the impact of surprise property occupancy costs in financial results.
