Dilapidations Arbitration Clause for Commercial Leases
In tandem with the launch of the scheme, Dilaps UK and Thomas Eggar LLP, have now made available a draft Arbitration clause to cover dilapidations disputes. We believe landlords and tenants will want to include this clause in all their commercial leases granted in the future.
The clause provides for dilapidations disputes to be dealt with in an expeditious way without having to involve the Courts. Like the standard procedure for rent review, the areas of dispute can be dealt with by a specialist in this area acting as an expert or arbitrator depending on the circumstances. Legal issues can be dealt with by obtaining advice from an assessor where appropriate. It is hoped that this process will remove the frustrations that parties feel when trying to deal with dilapidations through current processes.
In simplistic terms, says Anthony Lorenz, one of the founders of Dilaps UK, a Landlord serves a costed schedule of Dilapidations on the Tenant up to three months after expiry.
The Tenant serves any notice of objection within 3 months. If the parties are unable to negotiate a settlement, either party can apply to the RICS for a nominated Arbitrator or Expert. He will be a qualified dilapidations surveyor who will assess the respective proposals, the fairness thereof, and arrive at his determination with or without further representations.
In the case of an expert, he probably would not want to receive representations and would rely on his assessment as opposed to the respective parties.
The clause also refers to the jurisdiction of the Expert or Arbitrator’s fees where it is suggested that he allocates the fees in favour of the party who has submitted the closest proposal to his Determination.
The Clause is available to download from this website at a cost of £200 inclusive of VAT payable by credit card and Thomas Eggar and Dilaps UK have kindly donated all proceeds raised to a well known Children's charity.
Thomas Eggar LLP offers a full litigation and dispute resolution service related to all types of property interests. It has a very strong and well established Property Group with over 65 lawyers working in the property teams. The property practice has established a reputation for providing specialist advice on all property issues. Their clients extend from large corporations, pension funds, educational institutions and contractors through to smaller enterprises and individual landowners. The property group has been recognised by Chambers UK, a Client’s Guide to the Legal Profession 2010 on a variety of property concerns, including acquisitions and disposals, landlord and tenant work, portfolio management and property investment, property finance and planning and environment issues.
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