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Dilapidations Guidance Notes - 1st Associated · PDF fileGuidance Notes that the Guidance Notes are considered Best ... The purpose of this GN is to give practical guidance for RICS

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    Dilapidations

    Guidance Notes

    Fifth Edition

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    without express written permission

    The RICS Various Guides

    to Good Practice

    These are broadly divided into guidance notes, which are to guide, as the name suggests, and practice statements which you must follow. But its not quite as simple as that.

    The RICS advise us on almost the first page of the DilapidationsGuidance Notes that the Guidance Notes are considered Best Practice and that if allegations of professional negligence are made against the surveyor then the court is likely to take into account the contents of any relevant Guidance Notes.

    It then says that in the opinion of the RICS conforming to theseGuidance Notes would at least be considered as a partial defenceagainst any such court action (however caveats this (as all goodsurveyors will)), such is the responsibility of the surveyor to decide if it is inappropriate to follow the Guidelines!

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    The RICS Guidance Notes divided into 12 very readable sections

    As far as guidance notes go we believe these dilapidations ones are very, very readable! So read them!

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    Section 1 Introduction

    Section 2 Role of the Surveyor

    Section 3 Taking Instructions

    Section 4 Lease and Other Enquiries

    Section 5 Inspection

    Section 6 Schedule

    Section 7 Claims at the end of the term

    Section 8 Claims during the term

    Section 9 Break Clauses

    Section 10 Claims against Landlords

    Section 11 Alternative Dispute Resolution

    Section 12 - Settlement

    And we mustnt forget the Appendices which have examples of Schedules of Dilapidations, Scots Schedules and extracts from legislation, together with PLA Protocol and the CPR (Civil Procedure Rules) Practice.

    Sections

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    1. Introduction

    The purpose of this GN is to give practical guidance for RICS Members instructed on dilapidations.

    Dilapidations defined as an allegation of breach of contract which is actionable in law.

    A resume of whats in the Guidance Notes is given which also introduces various naming conventions.

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    2. Role of the Surveyor

    Are you appointed as an advisor or an Expert Witness ?

    What is the difference?

    Reference is made to the surveyor acting with objectivity and within the Rules of Conduct, why?

    2.1.4 states the surveyor should guard against exaggeration or understatement, why?

    2.1.6 the surveyor should be mindful that dilapidations involve many legal considerations and the surveyor should avoid advising outside the area of expertise you are a chartered surveyor not a lawyer.

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    Acting as advisor (not instructed as an expert witness)

    2.2.5 An adviser using his or her expertise to prepare or comment on a schedule or a valuation is not an Expert Witness. The Expert Witness Practice Statement (Reminder a Practice Statements you have to comply with) will therefore not apply.

    2.2.6 Surveyors should not formalise settlement. Settlements are usually formalised by solicitors.

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    Expert Witness

    This is a personal appointment where the surveyors obligation and duty is to the Tribunal, rather than his or her client

    Briefly stating the obligation of an Expert Witness to any Tribunal is to give objective unbiased evidence.

    Most surveyors are initially instructed as advisers. If the Dilapidations claim then goes to Court they may well be instructed as an Expert Witness, although Dilapidations claims rarely go toCourt,

    Should the surveyor that acted as an advisor be able to step into the shoes of an Expert Witness in Court?

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    3. Taking Instructions

    Generally

    Remember the RICS Rules of Conduct

    Fees

    A widely discussed area should surveyors charge an hourly rate or daily rate or should they be awarded on result, i.e. the money made by the landlord or the money saved by the tenant.

    Take ten minutes in your groupsto discuss and consider how result based payments can cause issues for the surveyor and how hourly rates can mean the client is signing a blank cheque?

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    4. Lease and Other Enquiries

    A very useful section that lists the information that, in an ideal world, you would like to have and in the real world you have to ask for and hope for.

    1. Scaled plan

    2. Licences or other consents for alterations with plans and specifications.

    3. Any agreements for Lease.

    4. Assignments and Licences to Assign.

    5. Side Letters and other written Agreements.

    6. Schedules of Condition, together with appropriate photos.

    7. Inventories

    8. Schedules of fixtures and fittings

    9. Any Notices under the Landlord and Tenant Act 1954

    10. Any applications for Consent.

    You should check and double check what your client has, what information is available and read it and its amazing how much more

    information clients will find when they understand the finding of photos can save them thousands of pounds

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    Particular Lease Clauses to which the Surveyor will refer

    Clause 4.5. The 4 Rs:

    Repair Redecoration Reinstatement and alterations Regulations Statutory

    Are all defined, as well as demise and yielding up

    In brief, a Tenants obligations are limited to the property as being demised to it.

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    Yielding Up

    Yielding Up, the giving back of the property in accordance with the Yielding up clause, that may impose a different set of regulations that those set out in the 4Rs. An example is re-carpeting.

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    Clause 4.6 Recovery of Fees

    You need to check how fees are recoverable (particularly as it is your fees that we are talking about!). Often leases will have clauses within them enabling the landlord to claim the fees back for preparing and serving Schedules of Dilapidations.

    However, negotiation fees are a completely different matter!

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    Clause 4.7 Schedules of Condition

    (must be attached to a Lease)

    It states there is no standard approach for dealing with Schedules of Condition.

    Question: Take ten minutes to think of the three advantages and three disadvantages for a standard approach

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    Lease and Other Enquiries Project Specific (section 18)

    1. Current or historical Planning Consents Section 18(2)?

    2. Statutory Notices relating to the property, for example Environmental Health Notice to improve.

    3. Original current letting or investment details can be interesting.

    4. Very important the Landlords intention for the property at or shortly after the termination of the tenancy Section 18 (2) Agreements?

    5. Evidence of rental values and yields Section 18(1)

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    5. Inspection

    5.1 Follow the rules set down in the Lease for gaining access otherwise you are trespassing

    5.3 Usual to have Individual independent inspections and then joint inspection.

    5.4 Scope and standard of repair may depend on the location, for example Covent Garden years ago, when the units were warehouses, would require a different standard of repair to Covent Garden today of retail and leisure area. It also may berelevant to diminution in value and Landlords reversion

    5.5 Site notes fully fill them out, including data to allow you to calculate costs, measurements, etc and lots of photographs and sketches as necessary.

    5.6 Any specialist consultants required: engineer or quantity surveyor?

    5.7 Any further investigations M & E

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    6. Schedule

    Refer to the example Schedule of Dilapidations and Appendices B

    or handouts

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    6.4.1 Costing

    The Schedule of Dilaps should be costed if it is anticipated the appropriate remedy is damage. It should be costed with due reference to relevant and appropriate cost information, which is available from a nu

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