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Important Legal Development for all Commercial Landlords and Tenants

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On 1st January 2012, the Pre-action Dilapidations Protocol came into force. This sets out what is required of both the landlord and the tenant before a claim is issued in the courts for damages relating to the physical state of the commercial property at the end of a lease.

hlw Keeble Hawson logoThis Protocol (in various versions) had previously been considered as best working practice, but now that it has been adopted as part of the Civil Procedure Rules, the Court has the power to impose sanctions for failure to comply with the Protocol before proceedings are issued.

The sanctions included in the Civil Procedure Rules can include costs penalties as well as requiring the proceedings to be stayed so that the Protocol can be complied with.

Commercial landlords and tenants need to familiarise themselves with the Protocol and note in particular the relatively short periods of time given for the preparation of the schedule of dilapidations (by the landlord) and the substantive response (by the tenant) as well as the encouragement given to consider some form of alternative dispute resolution before proceedings are contemplated.

The Protocol requires the quantification of the claim and provides for an opportunity to resolve the matter before parties commit themselves to the Court process. This is not only a sensible approach but one that the parties would ignore at their peril if the possibility of sanctions is to be avoided.

If you need guidance relating to commercial property disputes then please contact Sarah Burton of the Litigation and Dispute Resolution Department.

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