By the summer of 2020 many offices and shops were standing empty, and a lot of tenants were looking at break clauses and lease ends with fresh eyes. From 26 March, the day after it received Royal Assent, the Coronavirus Act 2020 stopped landlords forfeiting business leases for unpaid rent. It did not change the repairing, decorating and reinstatement covenants in those leases. Dilapidations claims kept coming.
For tenants with a break
Many break clauses are conditional: on vacant possession, on rent being paid, and sometimes on the repairing covenants being met. A tenant who wants to break needs to know early what the lease actually requires, and whether any condition could defeat the break. Getting that advice months before the break date is far cheaper than losing the break and paying for another five years.
For landlords at lease end
A landlord’s claim must be evidenced and proportionate. The Dilapidations Protocol expects the schedule to be served within a reasonable time and to set out what is claimed and why. Under section 18(1) of the Landlord and Tenant Act 1927, damages for disrepair cannot exceed the diminution in the value of the landlord’s reversion. In 2020, with demand for space uncertain, that cap mattered more than usual.
Access in a pandemic
Inspections still had to happen. Most could be done with an empty building and careful arrangements, and a full photographic record became even more valuable when the parties could not easily meet on site.
What has not changed
Whichever side you are on, the claim is only as good as its evidence: each item tied to a clause, photographed, and costed. That is the approach recommended by the RICS guidance note Dilapidations in England and Wales (7th edition). See our Dilapidations service, and examples for east London offices and a portfolio landlord.