Dilapidations Claims And The Impecunious Landlord

Some positive news for landlords this week:

The court has confirmed that, even where an outdated property stands little or no chance of being re-let following a tenant's departure, a claim for the loss in reversionary value caused by the breach of the tenant's repairing covenants is still possible.

Even where the landlord does not intend to carry out the repair works, because they would cost more than the ultimate value of the repaired building, the court can still carry out an exercise to value the loss occasioned to the landlord by virtue of the tenant's breach of the repairing covenants.

In Hammersmatch Properties, the landlord could not afford to carry out the necessary works of repair to its 1930s industrial and office building. It initially estimated the cost of works at £6.8m. The tenant argued that the property could not be let, even in repair, also that no reasonable landlord would spend that kind of money on it and therefore the landlord's claim