Survey of a Pub
Beware of Dilapidations
If you are looking for commercial property, whether it is freehold or leasehold, we would recommend a survey as this will prevent dilapidations claims in the long run. We can provide independent help and advice on all types of commercial properties including offices, warehouses, shops, pub and churches. For freehold purchases we will provide a Commercial Building Survey and for leasehold purchases we will prepare a Schedule of Condition together with a Property Report.
Please free phone 1stAssociated.co.uk on 0800 298 5424 for a friendly chat with one of our surveyors.
Property Report and Schedule of Condition for a Pub
In this case we were instructed to prepare a Property Report and Schedule of Condition for a pub. The Property Report gives advice on what we consider are the key property issues. The Schedule of Condition that is sent as a separate document relates to the lease and helps protect against future liabilities from dilapidations claims if legally appended to the lease.
Protocol gives guidance, and it is only guidance, that a Dilapidations notice is served by the landlord or landlords chartered surveyor 56 days after the end of a lease and then responded to within a set time by the tenant or the tenant's chartered surveyor.
A brief description of the pub
Full Repairing and Insuring Lease
In this case the property was being let on a standard Full Repairing and Insuring Lease (known as a FRI lease). A Full Repairing and Insuring lease normally has four sections known as covenants which we call the four ‘R’s:
There is often a further yield up covenant/clause should you wish to leave before the end of the term of the lease. These clauses are often referred to as covenants.
Condition of the building not up to Full Repairing and Insuring standard
The condition of this building was not to a current Full Repairing and Insuring lease standard which means any work that is not carried out would become the responsibility of our client from day one.
Existing dilapidations liability
We were advised that a dilapidations has been served on the existing leaseholder; if they do not carry out the work then the liability is transferred to the new leaseholder, our client. Most leases have clauses in them which allow the landlord to charge all costs associated with a dilapidations to the leaseholder.
In this case we believe the landlord had served a lightweight dilapidations. By the term lightweight we mean that the landlord is entitled to more however we believe they have taken a tactical decision as the lease is only part way finished and they wish to have a new tenant in to fully exercise their rights to dilapidations. We identified several property issues which we included within our Property Report and Schedule of Condition that were not mentioned in the Dilapidations that the pub company carried out. We believe the landlord is either Enterprise Inns or Punch Taverns.
Problems identified in our survey
Our survey identified several issues, below is a brief overview of some of the issues that we found which ultimately would become our clients responsibility at the end of the lease. Together they would add up to a substantial dilapidations claim by the landlord.
In this case after the client had read our report and following discussions with our surveyor he is now considering pulling out as he feels the liability is just too much. This is particularly important in this instance as there is only a short part of the lease remaining and the lease is excluded from the Landlord and Tenant Act, which means that they don’t have a right to continue on with the lease. He was both relieved and delighted that our survey report had ultimately saved him in the region of £45,000.
Other articles that may be of interest
We have written many surveying articles which may be of interest to you:
Compare our website and compare our surveys
We pride ourselves on our professional standard and easy to read reports which we have been carrying out for many years on every age, type and style of property across the UK. We encourage clients to have a look at our website 1stAssociated.co.uk to see for yourself the quality of our website, articles and our Building Survey reports.
We can email you examples of our building surveys
Meet with your Surveyor during the Survey
We highly recommend that if possible you meet the surveyor at the property during the survey so he can talk you through any problems. If this is not possible then you can always speak to our surveyors after you have read the report to talk through anything you would like further clarification on.
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