What is included in a Dilapidation Survey Report?

What is Included in a Dilapidation Survey Report?

A dilapidation survey report is drafted by a commercial building surveyor and is normally produced on behalf of the landlord. The landlord will issue the dilapidation survey report via their solicitor on to the tenant. The Schedule of Dilapidations is normally issued on to the tenant up to 12 months prior to expiry of the lease, but can be issued once the tenant has vacated the premises. It is imperative that the contents of the dilapidations survey report reflects the tenant’s lease obligations and any other associated legal documentation. The Dilapidations Survey Report should also take into other factors including the landlord’s intentions for the property. 

Dilapidation Survey Reports

The format of a dilapidation survey report will include a preamble section including setting out the scope of the instruction, the date of the survey and any limitations. A surveyor’s endorsement should also be included in the preambles section of the Dilapidations Survey Report. The dilapidations survey report will then go on to summarise the legal documents and covenants that are relevant to the potential dilapidations claim. 

Preambles 

The preambles section of the dilapidation survey report will repeat the relevant covenants that are included in the lease and will clarify the extent of the demise that is subject to the dilapidations survey report. It will then go on to include the wording that is included in the lease and will typically pick up on the covenants related to repair, reinstatement, alterations, decoration, compliance with statute etc. 

It may be that there are other relevant legal documents that need to be reviewed as part of the dilapidations survey report, these include licence for alterations, schedule of condition and other legal documents.

Commonly, if a tenant has undertaken works to a building, then a licence for alterations may have been produced/agreed to record the alterations that have been undertaken and to also provide wording on the tenant’s reinstatement obligations which will be incorporated into the dilapidations survey report.  

A schedule of condition may be appended to the lease, particularly if the property was in a poor or dilapidated state of repair when the lease was entered into. The schedule of condition will limit a tenant’s repair liability and therefore needs to be considered when drafting a dilapidations survey report. 

The Schedule 

The main part of the dilapidations survey report will be in the schedule of dilapidations, which will be drafted in tabular format. The schedule is normally divided into the different breaches: repairs, reinstatement, decoration, and statutory compliance. Sometimes the schedule is drafted on an elemental or area basis, so will cover specific elements such as the roof, elevations, specific rooms etc., and then list all breaches related to this element/area. 

The schedule of dilapidations will include an item number, a reference to the applicable lease covenant, a summary of the breach, the anticipated remedial works and a budget cost for the remedial works. 

Summary of Claim 

The dilapidations survey report will also include a summary of claim. The summary of claim will summarise all elements of the dilapidations survey report and provide a clear understanding of the items and costs associated with the dilapidations claim. The summary of claim will include a summary of the repair, reinstatement, decoration and statutory costs. It will also provide an indication of the contractors overhead, profit and preliminaries that will be applicable to the Schedule of Dilapidations. The summary of claim will include professional fees associated with the dilapidations survey report, including the commercial building surveyor’s fees for preparing the report and managing any works and for various other professionals. 

The summary of claim will also set out the consequential losses associated with the claim including loss of rent, loss of service charge, applicable business/vacant rates, VAT etc.

Quantified Demand 

If a commercial building surveyor is preparing a dilapidations survey report following lease expiry, then a quantified demand should be produced and included in the dilapidations survey report. as been prepared following lease expiry then it will include a quantified demand. The quantified demand will summarise all elements and costs related to the schedule of dilapidations and sets out the amount that the landlord is looking to recover from the tenant.

We hope you found this blog insightful, you can also check out our other dilapidation survey blogs. At Bower Surveyors, we offer Dilapidation surveys in the following parts of the UK: Dilapidation Survey Bristol, Dilapidation Survey Plymouth, Dilapidation Survey Swindon, Dilapidation Survey Cardiff, Dilapidation Survey Exeter.

Or you can head straight here for more information about: Schedule of Dilapidation