DilapidationsRICS Professional Guidance, England and Wales
6th edition, guidance note
Dilapidations6th edition, guidance note
The purpose of this guidance note is to provide practical guidanceto RICS members when instructed in connection with dilapidationsmatters in England and Wales. This is particularly relevant topractitioners in view of the recent adoption of a formal pre-actionprotocol under the Civil Procedure Rules (CPR).
The situations in which surveyors can be asked to act or advise,and which are covered by this guidance note, are as follows:
dilapidations claims at the end of the term dilapidations claims during the term forfeiture situations entry to repair situations break clause situations, and dilapidations claims by tenants against landlords.
RICS guidance note
6th edition (GN 35/2012)
Published by the Royal Institution of Chartered Surveyors (RICS)
Surveyor Court Westwood Business Park Coventry CV4 8JE UK
No responsibility for loss or damage caused to any person acting or refraining from action as a result of the material included in this publication can be accepted by the authors or RICS.
Produced by the Building Surveying Professional Group of the Royal Institution of Chartered Surveyors.
ISBN 978 1 84219 779 0
Royal Institution of Chartered Surveyors (RICS) April 2012. Copyright in all or part of this publication rests with RICS. No part of this work may be reproduced or used in any form or by any means including graphic, electronic, or mechanical, including photocopying, recording, taping or Web distribution, without the written permission of the Royal Institution of Chartered Surveyors or in line with the rules of an existing licence.
Typeset in Great Britain by Park Communications Limited, London
Printed in Great Britain by Park Communications Limited, London
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1 Introduction 3
1.1 General 3
1.2 Areas covered 3
1.3 Naming conventions 3
2 Role of the surveyor 4
2.1 General 4
2.2 Acting as adviser (but not instructed as an expert witness) 4
2.3 Expert witness 5
2.4 Dispute resolver 5
3 Taking instructions 6
3.1 General 6
3.2 Fees 6
4 The lease and other enquiries 7
4.1 Documentation 7
4.2 Lease clauses 7
4.3 Recovery of fees 8
4.4 Schedules of condition 8
4.5 Other enquiries 8
5 Inspection 9
6 The schedule of dilapidations 10
6.1 General 10
6.2 Layout and format 10
6.3 Costing 10
6.4 Service 10
6.5 The schedule of dilapidations in discussions 11
6.6 The Scott schedule in proceedings 11
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7 The Protocol 12
7.1 General 12
7.2 The lease, other documents and enquiries 12
7.3 Inspection 12
7.4 The schedule of dilapidations 12
7.5 Surveyors endorsement 13
7.6 Quantified demand 13
7.7 Service 15
7.8 The response 15
7.9 The Scott schedule 15
7.10 Dialogue/stocktake 15
7.11 Physical work versus damages 15
7.12 Court proceedings 16
8 Dilapidations claims at the end of the term 17
8.1 General 17
8.2 Principles of damages 17
8.3 Assessment of loss 17
9 Dilapidations claims during the term 19
9.1 General 19
9.2 Damages 19
9.3 Forfeiture 19
9.4 Entry to undertake remedial works 20
9.5 Instructions 20
9.6 The lease, other documents and enquiries 20
9.7 Inspection 20
9.8 Schedule of dilapidations 20
9.9 Service 21
9.10 Response 21
9.11 Undertaking the work 21
9.12 Subsequent steps 21
9.13 Court proceedings 21
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10 Break clauses 22
10.1 General 22
10.2 Instruction, lease, enquiries and inspection 22
10.3 Schedule of dilapidations 23
10.4 Service 23
10.5 Response 23
10.6 Dialogue and court proceedings 23
11 Dilapidations claims against landlords 24
11.1 General 24
11.2 Remedies 24
11.3 Instructions, documentation and inspection 25
11.4 Schedule of dilapidations 25
11.5 Service 25
11.6 Response 25
11.7 Undertaking the work 25
11.8 Subsequent steps 25
11.9 Court proceedings 26
12 Alternative dispute resolution 27
13 Settlements 28
A Example format of a schedule of dilapidations 29
B Example extract of a Scott schedule 30
C Value Added Tax 31
D Example of a Quantified Demand 32
E Extracts from legislation 33
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The sixth edition the RICS Dilapidation guidance note was produced by the Dilapidations Working Group. RICS wishes to express its sincere thanks to the working group members:
Chair: Bartle Woolhouse, BSc(Hons) MRICS
Terry Davis, FRICS
Brian Kilcoyne, BA (Oxon), Solicitor
Vivien King, BA, Solicitor, HonRICS, FInstCPD
Jon Rowling, Bsc(Hons) DipProjMan MBA, MRICS
Kevin Woudman, BSc(Hons), Dip.Arb, FRICS, FCIArb, QDR, MAE
John Parsons, DipPM, MAPM, AssocRICS
Thank you also to everyone who has reviewed previous drafts, in particular Guy Fetherstonhaugh QC and Hugh G M Love, PricewaterhouseCoopers, Scotland, for his contribution to the VAT appendix.
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RICS guidance notes
This is a guidance note. Where recommendations are made for specific professional tasks, these are intended to represent best practice, i.e. recommendations which in the opinion of RICS meet a high standard of professional competence.
Although members are not required to follow the recommendations contained in the note, they should take into account the following points.
When an allegation of professional negligence is made against a surveyor, a court or tribunal may take account of the contents of any relevant guidance notes published by RICS in deciding whether or not the member had acted with reasonable competence.
In the opinion of RICS, a member conforming to the practices recommended in this note should have at least a partial defence to an allegation of negligence if they have followed those practices. However, members have the responsibility of deciding when it is inappropriate to follow the guidance.
It is for each surveyor to decide on the appropriate procedure to follow in any professional task. However, where members do not comply with the practice recommended in this note, they should do so only for a good reason. In the event of a legal dispute, a court or tribunal may require them to explain why they decided not to adopt the recommended practice. Also, if members have not followed this guidance, and their actions are questioned in an RICS disciplinary case, they will be asked to explain the actions they did take and this may be taken into account by the Panel.
In addition, guidance notes are relevant to professional competence in that each member should be up to date and should have knowledge of guidance notes within a reasonable time of their coming into effect.
Document status defined
RICS produces a range of standards products. These have been defined in the table below. This document is a guidance note.
Type of document Definition Status
RICS practice statement Document that provides members with mandatory requirements under Rule 4 of the Rules of Conduct for members
RICS code of practice Standard approved by RICS, and endorsed by another professional body, that provides users with recommendations for accepted good practice as followed by conscientious practitioners
Mandatory or recommended good practice (will be confirmed in the document itself)
RICS guidance note Document that provides users with recommendations for accepted good practice as followed by competent and conscientious practitioners
Recommended good practice
RICS information paper Practice based information that provides users with the latest information and/or research
Information and/or explanatory commentary
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Dilapidations claim: the overall process associated with an allegation of a breach of lease/tenancy in relation to the condition and/or use of the premises, typically as identified in a schedule of dilapidations, Quantified Demand and/or diminution valuation.
Diminution valuation: a valuation prepared in order to calculate a claimants loss incurred as a result of alleged breaches. The document is usually prepared by a specialist valuation surveyor.
Dilapidations Protocol (the Protocol): pre-action protocol for claims for damages in relation to the physical state of commercial property at the termination of a tenancy.
Quantified Demand: a document prepared for the purpose of and complying with section 4 of the Protocol.
Response: a document prepared for the purpose of and complying with section 5 of the Protocol.
Schedule of dilapidations: a document which identifies relevant lease/tenancy obligations; alleged breaches of those obligations; any remedial works that have been completed or are proposed in order to rectify each alleged breach; and, in certain circumstances, the estimated or actual cost incurred in rectifying those breaches. The document is usually prepared by a building surveyor.
Schedules of dilapidations are commonly referred to in the follow