A Buyer will require a Dilapidations Report because they will be inheriting the potential liability to reinstate the property in accordance with those lease terms. The Buyer would need to quantify any exposure for dilapidations and will most likely negotiate this with the Vendor – the current tenant.
In theory, a Dilapidations Survey should be carried out by a surveyor on the day of completion. However, as it can take a couple of weeks for the resulting Dilapidations Report to be produced, the Survey is usually undertaken prior to completion and then followed up by a walkaround on completion day.
First, the surveyor produces a photographic and/or video record of the condition of the property at that point in time. The survey information is then transposed into a Dilapidations Report - this provides a clear, time-stamped and unambiguous document detailing the condition of the business premises and what is required to bring it back in line with the lease. As a Buyer, you can then negotiate any findings in the report with the Seller, who is most likely the current tenant.
Do I really need a Dilapidations Report?
Where Leasehold property is involved, the Dilapidations Report is a vital part of the completion process; it is an accurate reflection of the condition of any business-related property and saves any risk of argument in the future. As a Buyer, if you do not undertake a Dilapidations Survey and Report, you may find yourself at risk of disputes and even re-instatement claims brought by the Landlord.
If you are preparing to sell your business or would like to discuss this further, please call 01455 244444.
Please note that any information provided in this article cannot be considered as tax or legal advice. Always consult a solicitor for legal advice, or a specialist adviser for surveys and reports.
Posted on 15th January 2019 by George Seward | Permalink
Our principal, George Seward, has enviable expertise and experience in the field of food business sales and mergers.
The news presented in our blog is all written by George. Should you wish to speak to him about any of the issues discussed, please call our office directly on:
01455 244 444