Dan Wallis reviews a recent Dilapidations Litigation case that he has been involved in as Expert Witness

Dan Wallis reviews a recent Dilapidations Litigation case that he has been involved in as Expert Witness.

Dan Wallis, Associate and Building Surveyor within our Building Consultancy team, appraises a recent Dilapidations Case that he was actively involved in through to “successful” Litigation.

As a general rule, it is unusual for Dilapidations claims to reach Court, however, with the Tenant arguing there were NIL Dilapidations and with them not prepared to engage in any form of Pre-trail dialogue as required under the ‘PLA Protocol’, a recent case we have been involved in went all the way to the court room. 

It was an interesting, although rather unusual case, which all began with the Tenant making an over payment at lease expiry for insurance and service charge payments which our client, the Landlord, advised he would hold on to in settlement of outstanding sums due and use any remaining amount to off-set against any potential Dilapidations arising out of the Tenant’s occupation.  The Tenant disagreed, demanded the overpayment back and served litigation proceedings on the Landlord for formal recovery. 

Not aware of the already ongoing overpayment dispute, we were instructed by the Landlord to prepare a Terminal Schedule of Dilapidations which was formally served upon the Tenant.  The property comprised a typical detached steel portal frame industrial unit c. 6,000 sq/ft located in central Bristol. The property had been subject to heavy wear over the course of the Tenant’s 5-year lease.  The Tenant had the benefit of a Schedule of Condition appended to their lease, however, this largely evidenced the property as being in a good state of repair with the property having been repaired and decorated throughout prior to the tenant signing the lease.

Upon receipt of the schedule, the Tenant claimed they had no Dilapidations liability, claiming the property was handed back in a better state of repair than when they took it on. The Tenant was requested to put a stay on the current court proceedings, appoint their own Surveyor and engage in pre-trial negotiations in the hope an amicable settlement could be reached.  The Tenant showed a complete unwillingness to acknowledge the requirements of the Protocol and continued with court proceedings against the Landlord on the defence there were NIL Dilapidations. 

As part of Litigation proceedings both parties were required to appoint Surveyors to act in the capacity of Expert Witness. The Tenant’s Surveyor prepared a report which reflected the Tenant’s view that there were NIL dilapidations (based upon a common law and diminution in value argument).   The Tenant’s Surveyor was also claiming suppression on the basis that there was a break-in at the property where an illegal rave had taken place, after the date our Schedule of Dilapidations had been prepared. 

We stood by our Terminal Schedule of Dilapidations, which by now had been updated to take in to account any items which were superseded following the break-in and subject to a separate insurance claim.  In addition, by the time of the court hearing our schedule had been updated to be based upon contractor’s invoices for work actually completed to the property. As such, we were confident that our revised claim evidenced the common law claim for damages and accurately assessed the loss the Landlord had suffered.   A Diminution in Value Report was also commissioned which backed up our view on the claim. Despite all of this being presented to the Tenant and their Surveyor they disagreed and the matter continued to Court be decided in front of a judge. 

In addition to our written expert witness evidence, we were called upon in Court to give oral expert evidence in answering a series of questioning from the judge and cross examination by the Tenant’s Barrister. 

Following a two day trail the judge found his decision in favour of our client who was successful in his claim for damages against the Tenant and was awarded in excess of 85% of the value of the claim.

With too many surveyors ‘dabbling’ in Dilapidations claims, this result goes on to underpin why it is critical to appoint a well-recognised and proven successful Dilapidations Consultancy who have an enviable and proven track record in this often contentious arena.

Note:  for the purposes of client confidentiality we have specifically not mentioned the parties involved or any of the figures involved).