Client: Avaya
A major telecommunications company recently asked Gerald Eve to advise on its dilapidation liabilities and negotiate with the landlord’s representatives.
Our client’s leasehold on an office building in Welwyn Garden City had recently expired and they had received a dilapidation claim from the Landlord in excess of £500,000.
The terminal schedule prepared by the landlord’s advisers claimed that our client had failed to comply with its repairing and reinstatement covenants during and at expiry of the leasehold interest.
Our client had acquired the premises a number of years earlier by way of company acquisition. In this instance the immediate landlord was in fact the original parent company, which had sold the business at this location to the telecommunications company. Through careful and detailed review of the legal documentation relating to the leasehold interest and a thorough site inspection we were able to demonstrate that not only were substantial elements of the dilapidation claim over priced, but that a significant proportion of the dilapidation claim content was not the responsibility of our client.
The dilapidation claim was settled at a sum of £110,000 and whilst this took some little time to finalise due to the landlord’s assumption that it would receive a substantially greater sum, the episode demonstrated that dilapidation claims whilst first appearing as an unassailable document, can be closely questioned and deconstructed to ensure that any settlement reached is based solely on the parties’ contractual liabilities and not on wish lists.
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