Section 18 Dilapidations
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This is otherwise known as the diminution in value of the landlord s interest.
Section 18 dilapidations. Two key cases clearly demonstrate where a section 18 1 valuation may severely reduce a potential claim. Landlord s claim section 18 valuation approach a claim for dilapidations may be made by the landlord at any stage during the last three years of the lease term relating to breaches of covenant to repair which may have occurred by the tenant during such term. Two aspects have potential to reduce dilapidations payments.
Often when business owners leaseholders hear about a section 18 valuation they feel it is the answer to all of their prayers as it broadly speaking limits the size of the landlord s claim by what is known as the diminution in value which is the difference in cost that the dilapidations make to the rentable level of the property. A section 18 1 valuation provides a statutory cap for damages by calculating the difference by which the value of the landlord s interest has been reduced on account of the breaches of lease covenant. Too few landlords and tenants pay attention to the limitation on liability for dilapidations under section 18 landlord and tenant act 1927.
Section 18 or a diminution valuation.
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