BUILDING BLOCKS FOR DIMINUTION
The recent case provides good guidance for Building Surveyors on building a diminution case, with Landlord and Valuer techniques expressed as well.
British and Irish Legal Information Institute, has recently published the case summary:
Case No: HT-2013-000071:
The Judge Mr Stephen Furst QC covered topics such as:
The Judge found that the level of diminution was accurately reflected within the cost of the works undertaken by the Landlord. Landlords should be aware that Judges will take into account Landlords “actions and inactions” after the valuation date to inform their decision on the damage to the reversion, which ultimately reflects the loss.
The Building Surveyors agreed the breach, remedy and cost, with the Judge stating "in this case the parties have agreed the state of disrepair and the costs of remedying that disrepair. It is this cost which is the basic building block in the diminution calculation",
The judgement provides a good indication also as to the Judges views on costs and the extent to which Landlords when looking to recover these from the Tenant, need to consider the actions that they take, in the works they might carry out to the Premises, along with those which they do not take, or the works they decide might not be necessary to effectively market the Premises and the effect this might have on their claim.
St Patrick's Church in Watervliet, New York, America was redeveloped, despite lawsuits historic preservationists were not able to save the church, which closed in 2011. With the site redeveloped to provide a modern supermarket operated by a retail chain in 2013.
A photograph records an historical event which can be revisited, and whilst a Schedule of Condition is always important in any dilapidations claim, the Landlord and Tenant should be aware that if the site is being considered for any redevelopment then the Landlords claim may be null and void or reduced due to supersession, depending on the extent of works planned by the Landlord..
.....and in particular no damage shall be recovered for a breach of any such covenant or agreement to leave or put premises in repair at the termination of a lease, if it is shown that the premises, in whatever state of repair they might be, would at or shortly after the termination of the tenancy have been or be pulled down, or such structural alterations made therein as would render valueless the repairs covered by the covenant or agreement.
Due diligence may include checking planning authorities or other data sources to understand the intention of the parties on the future of the site...
PLA:Pre Action Protocol for Claims for Damages, The Dilapidations Protocol or known as 'protocol'. (January 2012) prepared by the Litigation Authority to resolve dilapidations disputes.
Diminution in value as defined by Section 18.1 of the 1927 Property Act. is a key part of dilapidations consideraton.