Challenge
A national retail tenant occupied a prominent city centre retail unit under a full repairing and insuring lease before exercising a break clause, which subsequently became disputed by the landlord on the basis of alleged non-compliance with the lease conditions.
The prolonged dispute resulted in the tenant losing its proposed relocation premises and ultimately led to legal action between the parties. A supplemental deed was later agreed, allowing the tenant a further 12-month term while maintaining most of the original lease obligations and providing additional time for both parties to negotiate an orderly exit strategy.
Following expiry of the extended term, the landlord served a terminal schedule of dilapidations and associated claim against the tenant.
Property Surv were appointed on behalf of the tenant to undertake a detailed review of the landlord’s claim, assess liability, and protect the tenant’s position.
The initial claim totalled approximately £347,000 and included substantial claims relating to reinstatement works, consequential losses, alleged breaches of vacant possession requirements, and additional associated costs.
Detailed investigation and analysis identified numerous inconsistencies and technical issues within the claim, including:
- Discrepancies between photographic schedules of condition
- Questions regarding the validity of supplemental lease documentation
- Service charge items incorrectly attributed to the tenant
- Unsubstantiated consequential loss claims
- Disputes surrounding vacant possession obligations
- Tenant alteration liabilities impacted by licence documentation
- Building fabric and maintenance issues extending beyond the tenant’s demise
The matter required a coordinated technical and strategic approach involving detailed lease analysis, building inspections, and collaboration alongside specialist legal advisers.
Solution
We undertook a comprehensive review of the lease documentation, schedules of condition, supplemental agreements, landlord’s claim documentation, and associated building information.
Our involvement included:
- Detailed analysis of lease obligations and repairing liabilities
- Review of historic documentation and contractual arrangements
- Multiple site inspections and technical assessments
- Drone surveys of roof and high-level elements
- Assessment of alleged breaches and reinstatement liabilities
- Review and challenge of consequential loss claims
- Technical analysis of tenant alterations and licence documentation
- Coordination alongside specialist legal advisers
- Strategic negotiation support throughout the dispute process
A holistic approach was adopted to assess both the technical and contractual position, enabling identification of areas where liability had been overstated or incorrectly attributed.
Outcome
The project successfully reduced the tenant’s financial exposure and supported resolution of a highly contentious dilapidations dispute without the need for formal court proceedings.
Key outcomes included:
- Significant reduction of the landlord’s original claim
- Successful challenge of unsupported consequential losses
- Clarification of repairing and reinstatement obligations
- Technical defence against disputed dilapidations items
- Coordinated resolution alongside legal advisers
- Protection of the tenant’s commercial position
Value
Original Claim: £347,000
Final Settlement: £24,679
