OPENING SHOTS


DEALING WITH DILAPIDATION: WHAT BUSINESS OWNERS NEED TO KNOW


David Barker, Associate Director at AHR, a building and consultancy practice offers a cautionary note on preparing a comprehensive schedule of conditions


F


or businesses looking to move to new premises, speed is of the essence. Business owners want to


ensure they can claim prime real estate before a competitor. A quick move can minimise disruption – and many business owners find themselves working with legal teams keen to get the deal done. However, doing so without investigating the current condition of their prospective property can create problems down the line. The last thing any business owner


wants is to put themselves at risk of a huge bill when they come to leaving a property. For that reason, it’s crucial for businesses to agree a schedule of condition with their landlords, before signing any contract. Without this, they can find themselves in a very weak position if a landlord presents them with a schedule of dilapidation – potentially costing thousands of pounds – at the end of a tenancy. With no record of the building condition at the start of a tenancy, it is very difficult for a business to challenge the claims being made. To avoid this issue, it’s key to have a


comprehensive schedule of condition carried out by a qualified building surveyor. The problem for businesses


is that these can take a great deal of time to create and might not contain the exact information required to challenge a landlord’s claim at a later date. Putting aside the hours needed to thoroughly photograph the premises, compile a report on the findings, and then agree this with a landlord, can be arduous. This process is also likely to take place once the tenancy is virtually agreed, with pressure to complete swiftly escalating.


the risk of missing areas that may later be claimed against, such as damage or damp. Images can also be tagged to provide more detail on defects that may not be obvious from a photo, such as faulty appliances. For businesses, this significantly reduces the risk of undisputable claims arising. It is also good due diligence to conduct


INNOVATIONS IN THE WAY A SCHEDULE OF CONDITION IS COMPILED MEANS THE TIME IT TAKES CAN BE DRASTICALLY CUT DOWN


Turning to tech Recent innovations in the way a schedule of condition is compiled means the time it takes can be drastically cut down. Using the latest smart 360-degree technology, a comprehensive photo record of the entire premises can be taken in a matter of hours. This technology ensures there is no gap in the photo record – reducing


a dilapidation pre-assessment well in advance of the end of a tenancy. Doing so can help identify repairs that need to be made at an earlier stage – allowing businesses to benefit from repair work, rather than completing it just in time for the next tenant. Collating information on the expected cost of repair work can also help businesses plan financially to cover these expenses over a number of years. This takes away the potential for business owners to find themselves sent large dilapidations claims they hadn’t budgeted for. Completing due diligence before


moving can be painstaking. This is especially the case when in the middle of a fast-paced property transaction. However, paying attention to the details at this stage can avoid significant issues further down the line. Reducing the risk in dealing with dilapidations is a must for savvy business owners. ■


12 SME MAGAZINE


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