We are also chartered valuation surveyors well versed in providing ‘Diminution Valuations’ pursuant to Section 18 (1) of the Landlord & Tenant Act 1927 in England & Wales, and Section 65 of the Landlord & Tenant (Amendment) Act 1990 in Ireland (the ‘statutory caps’).
These statutory caps are in place because, in most cases, the impact on ‘value’ of a property of breached clauses to repair, decorate and reinstate is less than the (lowest feasible) ‘cost’ of doing the remedial works. Moreover, many of claimed remedial works are either not actually done in practice, or will be ‘superseded’ (undone/destroyed by planned improvement and upgrade works), so as to be academic, rather than real, in any event.
For most second-hand commercial properties, one reaches a point in objectively targeted expenditure beyond which one can keep on spending in order to achieve perfect compliance, but no more will be added to - or recovered in - value.
Hence the reason why astute, and informed and skilfully produced Diminution Valuation reports are key to securing the correct outcome in dilapidations negotiations.
Whilst the above might sound very tenant biased, the Dilapidations Protocol does in fact dictate that landlords must obtain and produce a Section 18 Valuation to support a dilapidations claim in respect of which only some (or indeed none) of the claimed works are to be done. It is therefore in the landlord’s interest to have an objective and skilfully composed Section 18 report, both to maximise the fair outcome for them, and indeed to rebut an opportunistic Section 18 Valuation presented on behalf of the former tenant.