Landlords’ dilapidations recovery may be limited to the cost of work they actually carry out
Car Giant Ltd and another v Mayor and Burgesses of the London Borough of Hammersmith  EWHC 197 (TCC)
Hammersmith Borough Council’s lease included a covenant to yield up the property in good and substantial repair.
Car Giant together with others was the Council’s landlord. The landlords brought a claim for dilapidations at the end of the lease which exceeded the cost of the works that they, the landlords, had undertaken. They had carried out some repair work, however, much of the work referred to in the schedule of dilapidations had not been done.
Is a dilapidations settlement capital or income
In James Allan Thornton v HMRC , the First-tier Tribunal (FTT) considered the distinction between income and capital payments in relation to a dilapidations settlement and held that a payment to a landlord as compensation for dilapidations was a capital receipt.
James Allan Thornton owned 18 flats, known as Jordan House, Nairn (the property). The property had been the subject of a single lease.
Dilapidations in England and Wales, Guidance Note 7th Edition
The dilapidations guidance Note 7th Edition has now been published by RICs and is available for downloading on our website
This guidance note seeks to advise members on the factors they should take into consideration when producing Schedules of Dilapidations, Quantified Demands, Responses, Scott Schedules and Diminution Valuations for reference to or use by the client, the other party to the lease, third parties and tribunals.
Vacant possession and Demountable partitions
In Riverside Park Ltd v. NHS Property Services Ltd  a tenant's break notice was held to be ineffective because the tenant had failed to remove demountable partitioning from the premises and consequently had not complied with the obligation to give vacant possession.
Tyco Fire & Integrated Solutions (UK) Limited v. Regent Quay Development Company Limited - June 2016
Validity of notice exercising break option in lease
The Landlord, Regent Quay, owned commercial premises known as the Glover Pavilion in Aberdeen Science and Technology Park. It granted a lease of Units 3 and 4 to Tyco for a 10 year period expiring on 5 February 2014. The parties subsequently agreed to vary the terms of the lease to include Unit 1, extending the term of the lease until August 2021 and including a break option exercisable by the tenant after 5 years.
Laindon Holdings Limited v South Essex Partnership University NHS Foundation Trust 
A provision permitting internal non-structural alterations worked to the benefit of the tenant
Following the determination of a lease, Laindon Holdings Limited (the“Landlord”), brought a dilapidations claim against South Essex Partnership University NHS Trust (the “Tenant”).
Dilapidations advice crucial
While rent is the largest ongoing cost for a tenant, which start-ups may struggle to pay, once they have made that leap and need to move on to the next level - offices with greater floor space - they are then hit on the way out with dilapidations claims.
Consortium Commercial Developments Limited v ABB Limited
This case concerns a claim for dilapidations in relation to premises known as Capella House, Snowdon Drive, Milton Keynes, which was let for a term of 15 years expiring on 16 June 2011
Even though the lease expired some 4 years prior to the case, the disrepair and failure to re-instate that existed at lease expiry has not been remedied and the case concerned the amount that should be awarded to the landlord in relation to such breaches of covenant. Such damages being limited by S.18 (1) of the landlord and Tenant Act 1927 to the diminution in value caused by the disrepair.
Court of Appeal overrules High Court decision to allow M&S to claw back £1.1m in rent and other charges from Landlord.
This serves as a blow to tenants trying to claim back rents following a break clause when there is no specific provision listed.
If M&S had been successful, Landlords could have been forced to refund to tenants portions of rent and services changes paid to exercise a break clause, even if the lease failed to provide for this eventuality.
Disrepairs invalidate break attempt
The Scottish Court of Session, Outer House has recently held that where a tenant was required under a lease not to be in breach on serving a break notice “and/or” on the break date, the tenant’s substantial repair works between those two dates were of no avail.
In Arlington Business Parks GP v Scottish & Newcastle (2014) a lease of office space in Edinburgh contained a break clause that required the tenant to give 12 months’ notice and not be “in breach of any of their obligations … at the date of service of such notice and/or the termination date.”