Diminution Valuations for Tenants


As a tenant, when you are served with a Schedule of Dilapidations, or terminal dilapidations claim, it is vital that you respond in the precise manner outlined by Section 5 of the Dilapidations Protocol

Whilst you should he instructing a chartered building surveyor (which we can assist you with) to negotiate the Cost of Works claim against the landlord’s building surveyor, you should also instruct a chartered valuation surveyor to ensure that you do not end up settling at considerably over the odds.

When you have received a Schedule of Dilapidations (Quantified Demand) the ‘Dilapidations Protocol’ sets out a timescale and procedure for responding. This initial response will be prepared on your behalf by a chartered building surveyor (we can lead you to the best - contact us for more information). The Schedule of Dilapidations served upon you is usually an Excel type document to which your own building surveyor adds their own columns, either setting- out alternative remedies and/or alternative (lower) prices.

Building surveyors will negotiate this ‘Cost of Works’ assessment towards settlement.

At the same time, to reinforce your position in dilapidations negotiations and to ensure that you end up at the lowest possible settlement, you should make sure that the ‘statutory cap’ is properly pursued. This is an argument that damages suffered due to the impact of the breaches on the value of the property will be lower than the Cost of the Remedial Works.

This is called a ‘Diminution Valuation’. This is prepared by a chartered valuation surveyor. Our Directors and Associates are the leading lights in this specialism.

More often than not, this ‘statutory cap’ does serve to reduce the settlement figure to notably less than the lowest assessment of Cost of Works made by building surveyors.



Paul J Raeburn BSc (Hons) MRICS DipArb FCIArb 
RICS Accredited Mediator
 
Neil Burridge BSc (Hons) MRICS ACIArb
RICS Registered Valuer

RICS Registered Valuer
Regulated by RICS
Chartered Institute of Arbitrators