End of Lease Liabilities (Section 18 Dimution Valuation)
At the end of your lease there can still be liabilities to settle rather than simply walking away. These can be due to breaches of the terms of the lease, most commonly those relating to repairs. We work closely with our building surveyor colleagues who advise on the works required.
The improvement in the market has awakened more cases of dilapidation claims leading to consideration to the cap on the tenant’s liability. That relates to the impact on the value of the landlord’s interest after the lease ends.
Valuations, known as Section 18 valuations are required. They look at two elements. The first is the value had the tenant been in compliance with the repairing obligations. The second is the value of the property reflecting the tenant’s alleged failure to repair. At one time the step of last resort on a dilapidations claim, today under the Dilapidations Protocol these valuations are required at an early stage in proceedings.
The difference between the two could be lower than the cost of carrying out the works and thus limits the tenant’s liability.
Consideration of these valuations requires a surveyor with market knowledge and experience in landlord & tenant transactions. Our team has that mix of skills. The team is also well versed in court procedures if an amicable settlement is not available.
If you would like to discuss this service further, please do not hesitate to contact us.