When does a liability for dilapidations arise on surrender?
A recent High Court decision has found that liability for reinstatement of the premises was released by terms of a Deed of Surrender, which limited the liability to breaches that occurred before the date of surrender, thus releasing the parties from their obligations and from all liability arising on or after the date of surrender. The case represents an expensive reminder of the need for landlords to take care when drafting provisions for surrender.
The landlord leased premises to the tenant under four separate leases, each for a term expiring on 30 March 2014. Under the leases the tenant covenanted to keep the premises in good and substantial repair and condition. The tenant was further granted two licences to make alterations to the premises demised on terms that, before the expiration of the lease, the tenant would carry out the necessary reinstatement works.
In October 2009 the tenant entered creditors’ voluntary winding up and the defendants in the case were appointed joint liquidators. Shortly after appointment, the liquidators sought to surrender the leases at the premises and agreed terms with the landlord which had the effect of releasing the parties from all rights and obligations contained in the lease: “whether arising on or after, but not before the date of [the] surrender”…
If you are registered and logged in to the site, click on the link below to read the rest of the Walker Morris briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
Why register to The Lawyer
More relevant to you
News from Walker Morris
News from The Lawyer
Analysis from The Lawyer
Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all
The law school war shows no signs of ending. But we have, perhaps, reached the end of the beginning.