Dilapidations Claim Negotiation

Faced with a sizeable dilapidations claim in the face of an attempt to agree an early surrender deal, subsequently falling away, client sought to mitigate their alleged repairing covenant breach liabilities prior to the determination of the contractual lease term.

Extensive Fit Out and Need to Remain Fully Operational

Attended over the course of a long period of occupation, client's alteration and addition works extended to the most part of the combined 100,000 sq ft warehouse site, situated across two neighbouring buildings. Landlord sought full reinstatement of client's attendances and broader schemes of repair.

The lack of readiness of client's proposed future premises necessitated that the subject site must remain fully occupied and operational. A forward solution must thus enable minimal disruption whilst yielding the most favourable outcome financially.

Obstacles and Concern for Value

The constraints afforded by the circumstances and client's brief were materially significant, with the sum of the landlord's Terminal Schedule of Dilapidations and associated claim large and appearing to offer little value to the tenant client. 

The accrual of various repairing and reinstatement covenant breaches were recognised by the client, however, the extent of the alleged breaches appeared landlord favourable and related costs detached from what might have been considered to reflect market rates at the time.

Node Building Consultancy having been appointed in good time before the contractual term determination date, coupled with applicability of the statutory security of tenure provisions afforded by the Landlord & Tenant Act 1954, afforded client a broad range of dilapidations liability mitigation routes.

The Power of Knowledge and Leverage

In order to determine the market value of the works required to absolve client's alleged liability, an assessment of the claim was first carried out in order to qualify the components of that claim. Following appraisal of the landlord's claim and dismissal of numerous inclusions having regard for statute and precedent law, a strategically determined schedule of works was formulated and contractor costs procured. With costs known and an auditable trail in place affording those costs legitimacy, a firm basis for client favourable forward negotiation was established.

The residual contractual term length, coupled with the opportunity to hold over beyond the term determination date, enabled Node Building Consultancy to make client representations to the landlord claimant on an assured basis. Node Building Consultancy's ability to negotiate a client (tenant) favourable settlement was immeasurably improved as the opportunity to attend works, if a financial settlement in lieu could not agreed, remained a wholly feasible alternate means of conclusion. 

Concluding a process extending over a two year period, the development of a alleged dilapidations liability mitigation strategy on a wholistic basis, with full consideration of the applicable landlord and tenant matters applicable, yielded a highly client favourable outcome.

Maximising Savings Through Comprehensive Understanding

Through the application of specialist dilapidations matter knowledge and understanding, gained over the course of a plethora of prior dilapidations claim pursuit an defence instructions, Node Building Consultancy developed and enacted a highly strategic solution. Claim savings, relative to sum of the dilapidations claim, in excess of £1.6m (76%) were achieved in settlement.

In addition to the savings achieved, the solution arrived at also ensured client was able to continue their business operations without disruption. The agreement of client favourable financial and wider surrender deed terms enabled client to seamlessly relocate to new premises on timescales to suit them.