Accounting Perspective on Property

Property is typically thought to represent approximately 10% of business cost. Commercial companies should accrue for dilapidation liabilities of the properties they lease both annually and for end of term cash outflow (dilapidations liabilities and claims settlement). By way of example: Total estimated dilapidations (end of term cash outflow) = £300,000 for 10 properties = £30,000 per property. If each property averages 1,000 sq ft then £30,000/1,000 = £30 per sq ft dilapidations. If each property has 10-year lease terms then in simple terms [...]

The Dilapidations Jigsaw

UK commercial leases and licences and related legal documentation can be complex and difficult to decipher. Dilapidations claims can potentially be litigious. Statute in the form of Section 18 of The Landlord and Tenant Act 1927 places a cap on damages in dilapidations in England and Wales in certain circumstances. Protocols and procedures for handling dilapidations claims initially set by the Royal Institution of Chartered Surveyors (RICS) have been affected by the introduction of the Civil Procedure Rules (CPR) Pre-Action Protocol [...]