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Dilapidation Liability

Dilapidation Liability
24th April 2017

Dilapidation Liability

When looking at a new office, many tenants are only forecasting their move-in costs. They consider the costs of the lease, the fit out, new furniture and deposit, but dilapidation is often overlooked. However, the beginning of your lease is the exact time you should be negotiating your dilapidation liability.

When taking up CAT A office space, the market standard for dilapidation is pretty set in stone: you must return the space in the same condition you took it in. This would include taking out all partitioning, carpets, and wiring.

However, when taking spaces which already have some form of fit out, it is possible to negotiate a schedule of condition. This can minimise your dilapidation liability by up to £15 per sq ft.

Eugene O’Sullivan a very experienced Chartered Surveyor and Managing Director at Morgan Pryce says, “Many unrepresented companies will accept full dilapidation liabilities for offices where a schedule of condition would be appropriate. This is a perfect example of why it is important to be properly advised before entering into a lease.”

Furthermore, many companies do not realise that their dilapidations could be limited if the building they are leasing is redeveloped. In a market with such a high level of development, this affects a lot of companies’ dilapidation positions.

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.

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