Dilapidation Expert Determination Service
The traditional way of resolving dilapidations disputes between Landlords and Tenants is being challenged by a cheaper, quicker process – Expert Determination.
The dilapidations profession or ‘industry’ has historically been a very confrontational and litigious one. Landlords inflated claims and engaged in commercial practises designed to improve the chances of securing a favourable settlement. Tenants generally understated claims and deployed equally questionable behaviours to their benefit. As a result the middle ground for a settlement was sometimes difficult to reach and the roads parties travelled were long and full of risk. Inevitably, disputes would often reach impasse and court action followed.
The Dilapidations Protocol attempted to redress some of the poor practises by requiring parties to exchange information and more realistically state their actual positions. This has served to close the positions between the parties making settlement more achievable. Whilst the image of the dilapidations profession has improved there remain loopholes and opportunities to stretch the rules, and therefore disputes can still be protracted and costly.
Expert Determination offers the parties to a lease the opportunity of cutting through all this. The process is as follows:
- The parties agree to appoint a single joint expert to determine the dispute
- The Expert requests documentation the parties are able or willing to provide and ensures any without prejudice information is withheld
- The Expert will then inspect the premises and undertake whatever further investigation he/she feels is necessary to arrive at the correct answer to the dispute
- The Expert then publishes an Early Neutral Evaluation which is his/her early opinion on the answer to the dispute.
- The parties are given an opportunity to resolve the dispute through further negotiation, with the benefit of the Expert’s ENE.
- If required by the parties, the Expert then proceeds to finalise the determination and if required provides reasons supporting the determination.
- If required by the parties, the issue of costs can be included in the final determination.
The really interesting part of the work the Expert does is in applying his/her knowledge to the dispute in order to get to the right answer. Theoretically the parties only need to supply a copy of the lease – the Expert then has to do as much hard work as is necessary to get to the answer.
What type of dilapidations dispute can be resolved this way? The answer is all, as long as the parties can agree on the Expert to be appointed. In particular however, smaller disputes offer the best returns as in these types of claim the costs usually become more significant than the sum in dispute. The lower costs of Expert Determination therefore assist in giving the parties a cost-effective way of determining the dispute.
RICS has launched its Dilapidations Dispute Resolution Scheme which can be called on by parties through agreement, or can be contractually incorporated into lease agreements so that it automatically operates at lease end if the parties are unable to agree on the dilapidations liabilities.
Set Square now offer a single joint expert Dispute Resolution Service accredited by RICS to enable clients to resolve dilapidations disputes quickly and cost-effectively, allowing the parties to concentrate on the most important issue of all – to continue to build their business.
Paul French is appointed to the RICS’ panel of Experts Specialising in Dilapidations and offers single joint expert resolution of dilapidations disputes throughout the UK.