A few thoughts from Vivien King on the RICS
(Royal Institution of Chartered Surveyors)
Guidance Notes and Dilapidations
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RICS Guidance Notes
Vivien King was on the RICS (Royal Institution of Chartered Surveyors) working group drafting party for this, and previous additions, of the RICS Guidance Notes as well as being on the PLA Law Reform Committee, which drafted the Protocol, which is within the Guidance Notes. As well as this she is a solicitor in the filed of dilapidations and an honorary member of the RICS.
The rules of dilapidations
Vivien King presented a case that many from the legal and surveying profession don't stick to the rules, which we would wholeheartedly agree with, and reminded us that the dilapidations claim which was for a breach of a covenant to repair and that it is based on the law of contract in the lease and not on what the landlord or the landlord's surveyor would like to have carried out to improve the building so it is more rentable!
Ultimately, if this does get to court and we appreciate that few cases do get to court (and we all appreciate that many in the legal and surveying profession take the risk), Civil Procedure Rules will apply and it therefore should be borne in mind when considering dilapidations that you need to follow the rules of the RICS Guidance Notes.
Many lawyers often left speechless by surveyors
We would just repeat that many lawyers are often left speechless by surveyors. It is a theme that we would agree with and Vivien King comments that she doesn't believe that some surveyors know the very fundamentals of dilapidations (and to be fair she also mentioned that some members of her own profession also leave her speechless) and that the PLA Protocol was set down to give a fair and sensible playing field to be adopted by the civil court.
Have the rules really changed?
Johnsey Estates 1990 (Ltd) -v- Secretary of State for the Environment, Transport and Regions 2001, Ref: EGLR128
The point was made very well that you may win the litigation but a court can exercise its discretion as to how the costs should be awarded and they don't necessarily follow the event as they once did and exaggerated or understated cases will be penalised.
CPR Part 44, Rule 3
This states: in deciding what order (if any) to make about costs the court must have regard to all the circumstances, including conduct of the parties.
The conduct of the parties can be explained as:
Vivien King then identified what all surveyors that had dealt with dilaps for many years know pretty well, that most claims are exaggerated by the landlord's side and understated by the tenant's side, which simply can't carry on any longer and Vivien King advises that she knows no other area of law where such exaggeration or understatement takes place.
Schedules of wants of repair without reference to the
We consider the sins of all sins with dilapidations to be that a schedule is produced without reference to a lease. We would add to Vivien King's comments that we all know as surveyors that most leases have standard clauses. We do get very used to seeing the standard clauses and perhaps this is why sometimes schedules are produced without reference to the lease. However, it should not be the excuse, but more the reason, that we do look at leases to ensure that our schedules relate to them. Without this the schedules are useless, or in Vivien King's words they will render it valueless.
Business Environment Bow Lane Limited -v- Deanwater Estates Limited, formerly known as Gooch Webster Limited, and the exaggerated claim!
Whilst there are various complications to this case in essence a claim for £425,000 was made and a settlement agreed at about £1,000. The courts were asked to determine the costs. The Judge stated that he considered the claimant's (landlord) exaggerated claim prevented the defendant from analysing and assessing the claim against it, or settlement discussions taking place. The Judge made the claimant (landlord) pay the defendants costs.
This case means the pressure is on to put forward a true and sustainable claim and defence.
RICS Guidance Notes
The first point to be made was that it only relates to terminal claims. Terminal claims being defined as those that are served at the end of the term of the lease and doesn't relate to interim claims. Vivien King emphasises that the Guidance Notes are guidance notes and not a text book and she refers you to Dilapidations the Modern Law and Practice by Nick Dowding QC and Kirk Reynolds QC if you do want a good book on dilapidations.
Who pays the surveyors fees?
A reminder was given to ensure that your fees will be paid by your client and that they don't expect you to obtain them from the tenant (assuming you are working for the landlord) and the clause is or isn't within the Lease.
Remedy with a terminal schedule
The surveyor is reminded that the landlord's only remedy is for a claim in damages and the claim should accurately reflect the landlord's loss in putting the property back to the condition stated within the Lease. However, if the landlord does intend to do other work, for example a refurbishment, its value will be less than the works which the tenant may otherwise be responsible for in some cases, we would refer you to Section 18.
The Schedule, things that would help the lawyer
The surveyor could help the lawyer/solicitor by using the format set out within the Guidance Notes as they should; itemise number referencing for each item and every item and most importantly itemise the relevant clause in the Lease that has been breached and details of that alleged breach.
See our other articles and reviews on Dilapidations:
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