Dilapidations in the UK – diminution valuations. Issue 3 (7th April 2015)

• Record Type: Journal Article
• Authors: Norman Hutchison, Professor; Gilbert, David
• Is Part Of: Journal of property investment & finance. Volume 33:Issue 3(2015)
• Page Start: 282
• Page End: 290
• Publication Date: 2015-04-07
• Subjects: Real estate investment -- Great Britain -- Periodicals; Real property -- Valuation -- Great Britain -- Periodicals; Real estate development -- Great Britain -- Finance -- Periodicals; 332.6324094105
• DOI: 10.1108/JPIF-03-2015-0020
• Languages: English
• ISSNs: 1463-578X

Abstract

<abstract> <title> <x content-type="archive" xml:space="preserve">Abstract</x> </title> <sec> <title content-type="abstract-heading">Purpose</title> <p> – The purpose of this paper is to look at the practical considerations of valuations undertaken in the UK at the end of leases when the landlord and the tenant are negotiating on the dilapidations claim. </p> </sec> <sec> <title content-type="abstract-heading">Design/methodology/approach</title> <p> – The paper is a review of current professional practice and highlights the salient issues to consider when looking at dilapidation claims. </p> </sec> <sec> <title content-type="abstract-heading">Findings</title> <p> – The paper considers a fundamental principle of dilapidations. That is, how much has the market value of the landlord's interest diminished at the end of the lease by reason of the disrepair. </p> </sec> <sec> <title content-type="abstract-heading">Research limitations/implications</title> <p> – The paper is based on the interpretation of current statute and case law. Diminution valuations are hotly contested and there is currently little professional guidance available to practitioners. </p> </sec> <sec> <title content-type="abstract-heading">Practical implications</title> <p> – The paper guides landlords, tenants, building surveyors and their valuers on the thought process and practical approach to be adopted in assessing loss in dilapidations cases where the underlying assessment will be carried out on the basis of diminution in value. </p> </sec> <sec> <title content-type="abstract-heading">Originality/value</title> <p> – There is very little written on the practical implications of diminution valuations when assessing dilapidation claims. This paper addresses that shortcoming.</p> </sec> </abstract>