A simple guide to Office Dilapidation For Landlords and Tenants

 

If you’ve ever leased a commercial property, it’s likely that you have come across the term office dilapidation. Vacating a commercial property that you have leased will involve returning the space back to its primitive form (how it was before you entered the tenancy agreement), and in the world of commercial property, this is referred to as dilapidation. Each tenancy agreement is different; the exact details and clauses can be found in your original agreement with your landlord. We would also advise to keep any further correspondence on the matter logged and easy to find, so you have evidence to avoid any discrepancies down the line.

Whether it’s your first time, or fifth time moving out of a commercial space, dilapidation can be a difficult process to understand and manage. We have years of experience helping tenants and landlords carry out office dilapidation projects in Leeds and the North East, ensuring that the commercial spaces are returned to their original condition.

In our simple dilapidation guide, we will discuss what an office dilapidation involves, the associated costs, tips on how to get organised, how to negotiate with landlords and what landlords can do with their space to make it attractive to tenants.

What does an office dilapidation involve?

This is dependent on agreements with the landlord and the lease that is signed before the tenancy begins. The lease agreement should detail what is expected of the tenant, including the condition the landlord expects the property to be in when it comes to the end of your tenancy. Dilapidation can be a small project or a large project. Office dilapidation will often cover aspects such as the removal of furniture, signage, fixtures and fittings as well as more complicated works such as removal of partitioning and even kitchen or tea point areas. Essentially, anything and everything that you may have installed since the start of the lease.

However, the works required can vary from property to property, as some landlords will discuss and agree on which dilapidations are necessary. Should your fit out be deemed valuable to the landlord or to the next tenant, it may be more agreeable to leave certain items in situ for the next user.

How much does an office dilapidation cost?

Dilapidation costs vary for a few reasons such as individual lease agreements and the scope of works. Returning the décor to its original state, as well as small repairs are of course likely to be cheaper than works that are more complex, such as M&E, removing partitions and returning ceilings and flooring back to their original state. 

Tips on how to get organised

We would recommend giving yourself enough time to make the repairs before your lease ends. Think about how much time you need to carry out the alterations in accordance with the lease ending. The last thing you want is a month left on your lease and no plan! Leaving an office dilapidation until the last minute can result in higher costs. We understand how busy running a business can be, and that’s why we’re here to help. It is common to use an experienced and trusted company to help with dilapidation work, rather than trying to manage everything internally, this saves a lot of time and ensures the works are completed to the right standard for the landlord.

How do I negotiate with my landlord?

At Ben Johnson Interiors, our expertise is fit out services, however, we have lots of experience working with qualified building surveyors that specialise in dilapidation, taking all the stress away from you as a tenant and leaving it to the experts. Qualified building surveyors can help you negotiate the dilapidation clause with your current and new landlord, including reducing liabilities when moving into a new commercial building. Working with trusted partners like ourselves and our building surveyor partners can also help you verify as well as reduce costs.

A good example of this is our dilapidation work for SY4. SY4 moved out of the Marshall Mills building in Leeds, into a new commercial space in Wakefield. SY4 had used our services to fit out their office space at Marshall Mills and upon lease expiry, the landlord took the decision to leave the space how it was rather than returning it to its original state, therefore, reducing dilapidation liability on the tenant and saving on dilapidation costs.  

Landlords – How to attract tenants

“What can I do with my space?” is a question that gets asked a lot, especially in the competitive market that is commercial leasing. If a landlord has negotiated terms with their tenant, we can help return commercial building back to open plan, CAT A, or the original state. As a landlord, if you’re wanting to attract tenants, we can also help you by looking at reusing some of the existing fit out left by the previous tenant, or even adding to it to make the space more appealing.

Plug and play fit outs are on the rise, and it is easy to see why. A plug and play office refers to one that is ready for immediate occupancy, bringing lots of benefits to landlords and tenants alike. The benefits for landlords include offering a readily available, attractive office space to tenants, which results in quicker occupancy and can potentially increase the lease rates. The benefits for tenants are that the space is ready to use immediately, meaning no time wasted on a fit out and their business can continue as usual.

Ben Johnson Interiors recently worked with an asset management company in London to create a plug and play office space. They had struggled to let the office as the empty shell previously, and following our plug and play fit out, we not only received some great feedback from our client, but they were also successful in letting out the commercial space shortly after we completed the works on site!

 

So, if you’re a tenant seeking expert help with your office dilapidation, or a landlord looking for a trusted contractor to help attract tenants to your commercial space, get in touch! We’d love to hear from you.