THE TRADITIONAL WAY OF RESOLVING DILAPIDATIONS DISPUTES BETWEEN LANDLORDS AND TENANTS IS BEING CHALLENGED BY A CHEAPER, QUICKER PROCESS – EXPERT DETERMINATION.
The dilapidations business has historically been a very confrontational and litigious one. Landlords inflated claims and engaged in commercial practices 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 process was long and full of risk. Too many disputes had to be resolved in court.
The Dilapidations Protocol has succeeded in closing the positions between the parties and making settlement more achievable, by requiring parties to exchange information and more realistically state their actual positions. Yet loopholes and opportunities to stretch the rules remain, meaning disputes can still become protracted and costly. Expert Determination offers both parties the opportunity to cut through all this.
THE EXPERT DETERMINATION PROCESS STEP-BY-STEP:
- The parties agree to appoint a single joint expert with the knowledge and experience to determine the dispute.
- The expert requests all documentation that the parties are able or willing to provide and ensures any without prejudice information is withheld.
- The expert then inspects the premises and undertakes whatever further investigation he/she feels is necessary to arrive at a decision.
- The expert then publishes an Early Neutral Evaluation, which is his/her early opinion on how the dispute should be resolved.
- 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.
Any type of dilapidations dispute can be resolved in this way, as long as the parties can agree on the expert to be appointed. In particular, however, Expert Determination offers the best returns for smaller disputes, where the costs usually become more significant than the sum in dispute.
RICS has launched a 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 offers a single joint expert Dispute Resolution Service, accredited by RICS, to enable clients to resolve dilapidations disputes quickly and cost-effectively, and get on with building 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.