Partner Article

Dilapidations and Loss of Rent

With Watson Burton LLP Law Firm

It is generally a standard term in leases that at the end of the term the tenant should leave the premises clean and tidy and in a good state of repair. If the tenant does not comply with its obligations to put the premises back into a good state of repair, the landlord may effect the works himself and then claim damages from the tenant.

What many tenants may not realise is that the landlord may also be able to claim in respect of loss of rent for the period during which the repairs are carried out. At common law, loss of rent will only be available where it represents the landlord’s actual loss and accordingly (at common law) the landlord will need to be able to show that he could have let the premises earlier but for their state of repair. The period for which loss of rent may be awarded will depend on how long it would reasonably have taken the landlord to carry out the work. This may include time for preparing plans, putting work to tender, selecting a contractor and completing the work.

Entitlement to damages is subject to s.18(1) of the Landlord and Tenant Act 1927. Under this provision, damages cannot exceed the amount (if any) by which the value of the reversion in the premises is diminished owing to the breach. The correct approach to assessing damages which may be recoverable is therefore to assess damages on the basis of the amount recoverable at common law and then to ascertain the diminution in value of the reversion. The lesser of the two sums will be the recoverable amount. Loss of rent and other heads of damages can still be claimed, but the total damages cannot exceed the s.18 ceiling.

If you have a question relating to this article or any other property law matter, please contact Claire Waller at Watson Burton LLP (claire.waller@watsonburton.com).

This was posted in Bdaily's Members' News section by Ruth Mitchell .