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3 MAR 2022

Green and Sustainable Dilapidations

With the world turning its focus towards environmental sustainability goals, the need for green and sustainable practices in dilapidations is ever more relevant. New ways to approach dilapidations sustainably has since emerged, however, changes to the already established ways of working, often present challenges.  

The current practices of dilapidations are undeniably wasteful, due to the lease cycles of Category A and Category B that often create a significant amount of waste; a result of its strip-out and fit-in nature. The dilapidations practice caters for the tenants' specifications and the landlords' original plan. Nevertheless, the number of materials thrown out during these leasing cycles, do not only create an abundance of unnecessary waste but the new fit out of materials to replace them will add considerable carbon emissions.  Furthermore, new tenants often fit out the now cleared space with the same fittings and design, due to the nature of the building. Thus, well-designed office settings are often being removed at the end of a lease only to be replicated again by the new tenant. It’s evident that materials should have a longer life span, especially if they are still in very good or perfect condition, and to not automatically remove them as they may be wanted by the proceeding tenants.

The mission is then to create a sustainable dilapidations cycle without generating excess waste and carbon. One way is to approach these cycles is with a long term and evergreen strategy for both tenant and landlord requirements. One leading expert in this strategy is by TFT, as their Green Dilapidations strategy is designed to help tenants and landlords reduce waste materials and the cost associated with the leasing cycle of fit-out and strip out of commercial property spaces over their lifetime. 

Jon Rowling, the Technical Partner of TFT will be speaking more extensively about this strategy at the RICS Annual Dilapidation conference this year.  

My session will introduce a process by which the parties can collaborate to try to reduce waste at lease end, despite the law being far from aligned with these principles and despite the issues being embedded far earlier in the leasing cycle than at lease end.” 

Jon will be joined by Danielle Purkiss, an Architect and Research Fellow at the UCL Plastic Waste Innovation Hub and Institute of Making. He invited Danielle to speak with him at this year's conference after hearing on the radio an interview given by UCL’s Big Repair team on the topics of repairing and upscaling domestic appliances and equipment’s in commercial properties.  

We need to think about how we deal with those items during the lease and at lease end. I was inspired by what I heard in that interview and it is fantastic now to have the opportunity to hear directly from the Big Repair Project at the conference, to inspire the delegates around this subject. It is a fantastic bonus that Danielle is an architect so she fully understands the workings of the sorts of properties we deal with.” 

Financial Challenges of Green Dilapidation

Green dilapidations is key to achieving net-zero goals for commercial property. Challenges of rethinking green dilapidations may arise when asking who is responsible for payment of these new strategies being implemented. This then brings the debate of accountability in paying for the necessary renovations that comply with new energy standards and achieving net-zero goals.  

Currently, the assumption in dilapidations claims is that landlords will argue that their tenants pay for reinstatements. But new green dilapidations and net-zero goals could provide tenants with a way of reducing landlords' dilapidations claims. The claims may be argued against the landlords' net-zero targets and their adoption of the principle of a circular economy. We can expect tenants to raise this argument as a defence to some claims.  

Henrietta Hammonds, Partner at Beckett and Kay LLP and Siobhan Cross, Partner at Pinsent Masons LLP are experts in this subject matter. They are both specialists trained in dealing with dilapidations claims within commercial property, you can hear more from them at the upcoming UK Dilapidations Conference on 29th & 30th March 2022.

To find out the latest updates on dilapidations, which ranges from recent case law to negotiation tactics and the very latest in energy and carbon strategies, then join a host of specially selected speakers as we discuss current and upcoming issues with dedicated breakout streams for England and Wales, and Scotland at the RICS Dilapidations Annual Conference 2022from Tuesday 29th March to Wednesday 30th March.