What is Dilapidation | APSS

Next Tenant Please: What is Dilapidation?

At the end of your tenancy? When looking to move out of your office building, there are many stages of the process to look at. One of the terms you might hear is dilapidation. Although it may sound complicated, it is a term that is in fact very simple to explain.

So what is dilapidation?

Dilapidation works, also known as 'exit costs,' are incurred at the end of a lease agreement. These refer to the process of restoring a property to its original form and presentation. As a tenant, you would have agreed with your landlord in what state you will return your property right at the start of your tenancy. This is when it now comes into play. Unfortunately, for many tenants, the start of that agreement was a long long time ago, which is why it is crucial to get these agreements in writing and keep all documentation in a safe place to refer to when the time is right.

Dilapidation works could include taking down brand signage, partition walls, and equipment. All of this allows the building to be transformed into a blank canvas for the next tenant.

Every tenancy has its own agreement in place, which means no two dilapidations are the same. APSS works with both landlords and tenants, and both can have different requirements. Often we find tenants may need assistance identifying property damage in order to return it to its original condition and avoid additional surprise costs.

You might also require assistance in navigating the work itself. As the end of your lease approaches, you should consider what changes were made during the tenancy and assess what condition you need to return the property in. You can estimate the level of work required as part of your exit agreement with your landlord by referring back to your original agreement.

Landlords, on the other hand, may require additional assistance in creating a "white box" for the property's resale. This shortens the time it takes for a new tenant to move in. It also reduces downtime on a property where no rent is being paid.

How to best handle tenant dilapidations?

Regular inspections: Carry out regular inspections of the property to identify any signs of wear and tear or damage. This helps avoid costly repairs later on.

Create a plan: Develop a comprehensive plan for addressing dilapidation that outlines the specific issues. Think about how they will be addressed, and who will be responsible for handling them when a tenancy ends.

Get professional help: Depending on the conditions of your agreement, it may be necessary to get professional help. This could include hiring outside help to provide potential solutions.

Consider preventative maintenance: Regular maintenance can prevent any issues with dilapidation from occurring in the first place. Create a preventive maintenance plan that includes tasks to ensure you can hand your office space back in close to pristine condition.

Budget accordingly: Dilapidations can be expensive to address, so it's important to budget for it. Consider setting aside funds for ongoing maintenance and repairs to help prevent dilapidation from becoming a larger issue.

Overall, handling dilapidations requires a proactive approach and a commitment to safety and maintenance. By following these tips, you can help ensure the longevity of your property and the safety of its occupants.