Preparing and serving a dilapidations schedule

Normally, the claimant's solicitor will formally ‘serve’ the schedule of dilapidations, particularly when a formal section 146 notice or other formal notices under the lease are being served.

Where formal ‘service’ is not necessary it can be quite acceptable for the landlord's surveyor to simply issue this document on a client's behalf. In such instances, surveyors should advise clients to satisfy themselves by consultation with their solicitors that formal service is not required. In each case, confirmation should be obtained from the client of the address to which the schedule should be sent.

The surveyor should confirm with the client its requirements for service and timing of service of the schedule. For example, if the landlord wishes the tenant to comply with the lease covenants and merely hand back the property in compliance, it would be prudent to prepare and serve a schedule some 6-12 months in advance of expiry. However, if the landlord would prefer the tenant not to do the works, it may elect to serve the schedule at, or close to lease expiry. Surveyors should remember that there are no rules requiring landlords to produce schedules for tenants to consider and action – it is a tenant’s responsibility to comply with the lease.

One word of caution here though for surveyors acting for landlords. Surveyors need to carefully consider obligations to reinstate, and how these obligations are effected and controlled in the lease and any relevant licence documents. It is not uncommon for reinstatement obligations to be subject to phrases like ‘if required by the landlord, reinstate ... .’. In such situations, the landlord will need to give notice to the tenant to this effect. This can be achieved by sufficiently early issue of a schedule which requires reinstatement, or by a formal notification to the tenant that reinstatement is required.

Generally, the surveyor will be instructed to arrange for the schedule of dilapidations to be served on the party in breach of the lease, usually through the client’s solicitors. Sometimes that schedule will be accompanied by a summary setting out the claims that are being or can be made.

The manner in which the schedule is served will depend on the course of action the landlord wants to adopt and the objective it wants to achieve.

See the detailed discussion of this in Early consideration of the legal issues – Remedies and break clauses).

There are no procedural restrictions on making a claim for damages at the end of the term. Thus, for example, there is no need for a section 146 notice (see under Forfeiture) and there is no requirement to seek the court’s permission to make a claim under the Leasehold Property (Repairs) Act 1938. Therefore, there is no obligation to serve the schedule other than under cover of a letter. However, care must be taken, because the costs of service may not be recoverable once the term has come to an end, although modern leases usually make it clear that the costs of service are recoverable whether the schedule is served before or after the expiry of the term. The letter and schedule may also be accompanied by a summary of the claims made by the landlord.

Where the 1938 Act applies the schedule must be served with a notice given under section 146 of the Law of Property Act 1925 containing the form of words required by the 1938 Act. The notice may be served under cover of a letter and the letter and notice may be accompanied by a summary of the claims made by the landlord. Given the technical nature of the documents, they should be served by a solicitor.

In a damages case, the schedule can be served informally by way of an informal letter (as described in the preceding paragraphs) or as a ‘without prejudice’ repairs notice, but the tenant is not bound to take any action. However, the landlord might choose to adopt a low-key approach like this in order to maintain a cordial relationship with the tenant, and ignoring such an approach is likely to lead to a rapid escalation of the dispute.

If the schedule/notice is to be served formally, any relevant terms of the lease must be properly adhered to in order to ensure validity and usually it is best if the landlord’s solicitor undertakes this task.

Wherever a document is to be served, careful consideration should be given to the terms of the tenancy and any express provisions as to service. In some cases, section 196 of the Law of Property Act 1925 (which deals with service of notices under that Act, for example, a section 146 notice (see under Forfeiture) is incorporated or modified or is simply deemed to apply. Although in some circumstances a notice or document required to be served under the lease can be deemed to have been served even though it will never have reached the intended recipient, one should generally aim to ensure that the document does come to the attention of the intended recipient. Moreover, there are statutory requirements that may have to be satisfied, such as section 18(2) of the Landlord and Tenant Act 1927, concerning forfeiture.