Dilapidation Survey Report – The Process Explained

What is the Process of Undertaking a Dilapidation Survey Report?

The process of producing a dilapidation survey report will differ slightly depending upon whether a commercial building surveyor is undertaking the instruction on behalf of the landlord of the tenant. In addition, the contents of the dilapidation survey report will likely change subject to the type of dilapidations report required, which could be a terminal schedule of dilapidation, an interim schedule of dilapidations or a dilapidations liability assessment. Although the contents of the report may vary, the general approach to the instruction will broadly be the same. 

Desktop Review

It is important that prior to any inspection a surveyor obtains all the relevant legal documentation which will assist with production of a dilapidation survey report, or responding to a dilapidation survey report. The documents which a surveyor would typically expect to review are the lease; licence for alterations; and schedule of condition. These documents will need to be reviewed in detail to ensure the building surveyor is aware of the extent of the demise, the associated liabilities and any other implications which will impact a dilapidations claim.

In addition to the above, a building surveyor can undertake a general desktop review of the building to undertake its size, use, age, location etc. Obtaining drawings, O&M Manuals and other as-built information will assist with the building surveyor’s inspection and accurate production of the dilapidation survey report. A review of the local planning authority’s website or relevant marketing particulars will also assist with understanding the intention for the property. 

Consultant Team

For larger more complex instructions there may be a requirement to engage specialist consultants. More often than not a building surveying will be able to make an assessment on the condition of all elements using their expertise; however it may be prudent to engage a mechanical and electrical consultant to advise on the condition of the service installations. 

A client will typically engage a solicitor to serve the schedule of dilapidations to ensure that the report is served correctly and that any other matters in relation to the lease are dealt with at the same time.

Undertaking the building survey 

Prior to the inspection the building surveyor should ensure that access is available to the commercial property and all parts of the property. Should there be no safe access to the roof via the building then it may be necessary to hire access equipment for the survey. 

Once on site a commercial building surveyor should use a methodical approach to assess the condition of the building. All surveyors will have a different approach to surveying a property, although most work on an outside/inside or inside/outside approach. The building surveyor should record breaches of the lease, and ensure they have taken sufficient quantities to enable accurate budget costings to be included within the dilapidation survey report. 

If undertaking the survey on behalf of a tenant then the building surveyor will often be able to utilise the dilapidations survey report which has already been produced and served by the landlord. This will enable the building surveyor to use the existing report as a checklist to assess whether the items and costs included by the landlord are reasonable. It should be noted that a building surveyor should also review the commercial property to assess whether there is a risk that the dilapidation claim could increase. 

Drafting the report 

Once the information from the survey is obtained then the surveyor will start to produce the report. A report will typically include a preamble which will summarise the relevant elements of the legal documentation which was obtained as part of the desktop exercise. The surveyor will then produce the schedule which will include the breach, the proposed remedy, the budget costs for the remedy, and also include confirmation of which lease covenant the item relates to. 

The report will contain a summary of the costs which will comprise the cost of the works, contractor’s prelims and OHP, and the professional fees associated to undertaking the works and producing the dilapidation survey report. The summary may also include costs for consequential losses which comprise loss or rent, service charge and rates. The costs may include or exclude VAT dependent on whether the landlord can recover VAT. 

If the dilapidation survey report is prepared for a landlord after lease expiry then it will also include a Quantified Demand which is a summary of all costs which the landlord is looking to recover from the tenant. 

We hope you found this dilapidation survey checklist helpful. At Commercial Building Surveyors, we offer Dilapidation surveys in the following parts of the UK: Dilapidation Survey Bristol, Dilapidation Survey London, Dilapidation Survey Manchester.

Or you can head straight here for more information about: Schedule of Dilapidation