Car Giant Limited & Acredart Limited v The Mayor and Burgesses of the London Borough of Hammersmith 2017
An inflated dilapidations claim costs landlord dearly.
At the termination of a lease, the landlord carried out repair works, at a cost of around £183,000 but sought damages for dilapidations that included the cost of other works, which had not been undertaken, at a cost of around £402,000 (the difference being around £219,000).
The Landlord and Tenant Act 1927 section 18 (1) provides that damages for breaching of the relevant lease terms shall not exceed the amount by which the value of the reversion is diminished.
The judge concluded that the cost of work already undertaken, was the amount by which the value had been diminished but rejected the remainder on the basis that the works to which it related were not done in the 6 years since the lease term ended and the lack of them had not caused rental levels to be reduced in subsequent lettings. Accordingly the value had not been diminished by the additional amount of £219,000.00.
In addition, the landlord lost a significant sum of it’s damages in costs