Landlord Fails in £1.2 Million Dilapidations Claim

Landlord Fails in £1.2 Million Dilapidations Claim

A landlord left with a dilapidated property after its tenant went into liquidation has failed in a bid to recover more than £1.2 million after a High Court judge ruled that the alleged debt had not been calculated in accordance with section 18(1) of the Landlord and Tenant Act 1927.

The purported debt had been assessed on the basis of a rent-free period that was granted to a subsequent tenant of the office property, rather than on the basis of any diminution in the value of the reversion that resulted from the tenant’s failure to comply with the repair covenant contained within the lease. Whilst not ruling out the possibility that a provable debt may exist, the court decided that it must be subjected to the limits imposed by section 18 and its calculation will necessarily require the valuation of the reversion of the property in its actual state at the date of the surrender of the leases and its repaired state.