Property update — January 2014: dilapidations

In its May 2013 property update, Wragge & Co looked at whether a tenant who hands back out-of-date plant and machinery has complied with its repairing obligations. The High Court, in the case of Sunlife Europe Properties Ltd v Tiger Aspect Holdings Ltd, held that as long as the equipment is working there is no obligation to replace, renew or upgrade a dated system to modern standards (unless the lease or legislation says otherwise).

Despite winning on that particular issue — and therefore not being liable to replace the outmoded air-conditioning system — the tenant appealed.

The High Court judge had found the tenant, Tiger Aspect, liable to pay £1.4m in damages to its landlord. The judge had undertaken a meticulous examination of the competing sets of evidence, presented by the parties’ respective surveyors, and found the tenant to be in breach — in many respects — of its obligation to hand back the premises in a state consistent with the repair and decoration covenants imposed by the lease…

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