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New Dilapidations Protocol introduced.

January 12, 2012

New Dilapidations Protocol introduced.

The new Dilapidations Protocol was introduced by the Property litigation Association and was endorsed by the Institute of Chartered Surveyors as best practice in its dilapidations guidance notes.

The protocol has now been formally adopted under the Civil Procedure Rules (CPR) and came into force on the 1st January 2012.

The protocol applies to commercial property situated in England and Wales. It relates to claims for damages for dilapidations against Tenants at the termination of a tenancy.

The proceedure of the protocol remains unchanged.

  • The Landlord serves a letter of claim with a schedule annexed which is specified as 56 days from the date of expiry of the Lease.
  • A response must be served within 56 days of receipt.
  • The Landlord and Tenant and/or advisisor are encouraged to meet without prejudice following exchange of their claim and response, preferably on site and within 28 days of service of the Tenant’s response.

A more significant change to the protocol is ADR. The parties must consider ADR and a warning is given that if the protocol is not followed then the court must have regard to such conduct when determining costs.

The main change to the protocol will be that the tenant’s surveyor will now have to endorse the tenants’ response to the landlords claim for damages.

That endorsement will confirm;

  • that the works that the tenants are suggesting are all that is reasonably required to remedy the alleged breaches;
  • that any costs quoted in the tenants response are a reasonable amount payable for those works;
  • an account has been taken of what the tenants surveyors reasonably believe are the landlords intentions for the property.

The protocol will carry the same force as the other protocols referred to in the Civil procedure rules and as with the other protocols there will be penalties in costs if parties don’t substantially follow it.

“It was felt very strongly by the RICS that there should be specific reference to this, and the fact that where the court is considering this point it will be concerned ‘about whether the parties have complied in substance with the relevant principles and requirements and is not likely to be concerned with minor and technical shortcoming.”

The change means that parties cannot overstate or under state their position otherwise they will be penalised and should make settlement of dilapidations claims much easier.