Section 18(1) and diminution in value

Supersession is a term that appears within the second valuation ‘in actual condition’.

It generally applies where the plans of either the hypothetical purchaser (under limb 1) or the landlord (under limb 2) extend to include improvement, alteration or demolition works that serve to render valueless some or all of the costs of repairs, decorations or reinstatement.

The concept of supersession in limiting the tenant’s liability is more often a matter of degree dependent on the scope of the landlord’s intentions for the building, whether this is a light or more comprehensive refurbishment. Each situation requires a detailed assessment of the extent to which the landlord’s proposals impact on the claim in dilapidations to render valueless elements of work.

The issue of supersession is complex as there is no universally accepted definition of when items can be said to have been superseded.

Consider, for instance, a building that has LG3 lighting in a state of disrepair. The hypothetical purchaser has plans for a grander scheme to include the upgrade of the lights to more modern LED panels. The cost of the repairs to the LG3 fittings would be said to be superseded by the plans of the purchaser.

Conversely, where there is causation, it may be contended that the upgrade works were only undertaken as a result of the disrepair, say because the landlord could no longer source the replacement parts or where the upgrade costs were only marginally greater than the cost of the repairs. In these instances, it is arguable that the cost of repairs would not be superseded.

Date of assessment of damages (valuation date)

The relevant date at which the damage to the landlord’s reversion is to be assessed is at the end of the lease.