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Archive for May, 2013

For the student and the seasoned practitioner

Dilapidations is of course a topic much referred to in these newsletters.  The recently reported case of Hammersmatch Properties (Welwyn) Limited v Saint-Gobain Ceramics and Plastics Limited [2013] EWHC 1161 (TCC) may not say a lot that is new but the judge, The Hon Mr Justice Ramsey, certainly gives practitioners an object lesson in returning to the fundamentals.

The tenant left a large, 1930s industrial building, with some offices, in a dilapidated state on the basis that no reasonable landlord would conduct the works of repair required to be conducted by the tenant.  Quite simply, pleaded the tenant, there would be no one in the market to take such a building even in repair.  The landlord threatened, but failed to do so, to conduct the remedial works.  It sought the cost of the works, initially some £5m, as damages.

The judge found as a fact the cost of the works exceeded the value of the property in repair.  He concluded the landlord would not have done the works.  Instead, in applying s18(1) of the Landlord and Tenant Act 1927 he took the value of the property in repair and deducted from that the site value of the premises leaving a difference of £900,000 to which he added specified costs of the schedule of dilapidations and interest.  He declared the resultant sum as the extent of the landlord’s damages.

It is not, however, the judgement that makes this case interesting to those working in the field of dilapidations.  It is the judge’s comments re the ‘general principles’ he applied which will mean the case will become a ‘check list’ for all.  Going back to essential basics, he considered, with case law, such matters as the meaning of disrepair, the standard of repair contemplated by the covenant, an objective standard ascertained by reference to circumstances at the date of the lease, what makes the premises reasonably fit for occupation and whether replacement rather than repair is appropriate.  His words give something for everyone from the student to the seasoned practitioner.

If you wish to hear more about dilapidations, contact Hatherleigh Training.