Case Study

Freeman Common, Leicester

We were instructed to negotiate a claim for a Tenant who was renting a detached industrial property in Leicester City Centre. 

The Landlord's (Cost of Works) Claim by their Building Surveyor was estimated at £133,501.82. On behalf of the tenant, Dialpsolutions (Cost of Works) response by our Building Surveyor was £51,000. 

The above opposing figures between Building Surveyors ordinarily set the parameters of the eventual settlement sum. This is the case in all dilapidations negotiations if the Tenant does not robustly and expertly employ the Section 18/Diminution in Value (DV) defence. As no dilapidations consultants other than Dilapsolutions employ Valuers as well as Building Surveyors, the Tenant has first to know and appreciate the significance of the DV defence, and then know where to source it (at an additional fee).

The Diminution in Value Assessment provided by our valuer was around £6,000. 

A settlement was agreed at £5,532, which only covered the landlord's fees for preparing the Schedule of Dilapidations.

As part of our investigations and research, we discovered that the Landlord had agreed on terms to relet the property immediately at the valuation date and at a rent that reflected the open market position, with the new tenant responsible for all repairs and no Landlord works to be undertaken prior to commencement.

From analysing the deal agreed, it was clear that this reflected the full open market value of the property at the valuation date which meant the property was still worth its full freehold market value and there was no "loss" to the landlord.