Value Of Dilapidations

In a recent case on the value of dilapidations, both parties' expert valuation evidence was criticised by the judge ... in reaching their conclusions they lacked 'objective reasoning' and were unable to provide clear analysis of their evidence to support their subjective opinions.

Lesley Robinson provides an update on this recent case

Recently, the Technology and Construction Court reminded parties how damages for dilapidations should be valued.

In Consortium Commercial Developments Limited v ABB Limited [2015] EWHC 2128 (TCC) the judge had to examine the valuation evidence put forward by both parties' experts in relation to the value of dilapidations. The landlord's expert contended damages was the cost of repairs (£315,000) while the tenant's expert argued it was limited to the loss or diminution in the value of the landlord's interest under section 18(1) Landlord & Tenant Act 1927 (£75,000).

The outgoing tenant did not carry out any repairs, arguing that there was no demand for the property, in or out of repair given its age, character and location. The landlord did not do the works at expiry of the lease arguing that it wanted to recover the costs from the tenant beforehand and that it was better to wait for the rental market to improve so it would then re-let the property in repair at a higher rent. There was also an argument about how the costs of reinstatement works should be assessed.

'The judge was further critical that, on cross examination, the failure to make reasonable concessions when errors were apparent further undermined an expert's credibility'

Both parties' expert valuation evidence was criticised by the judge. He complained that in reaching their conclusions they lacked 'objective reasoning' and were unable to provide clear analysis of their evidence to support their subjective opinions. He was further critical that, on cross examination, the failure to make reasonable concessions when errors were apparent further undermined an expert's credibility.

The judge carried out his own objective analysis of the comparable evidence. He decided that a...