The Crown Estate & Schedule of Dilapidations

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    The Crown Estate & Schedule of Dilapidations

    Hi All,
    I am looking at buying a going concern business in premises owned by the Crown Estates. The current lease has only 9 months left of a 10 year lease. The lease has a service charge and the current tenant believes that there would be little or no dilapidation at the end of the lease due to the service charge, which is for the upkeep and maintenance of the building.

    I have no idea about such things and I think my solicitor is maybe out of his depth. If anyone has any experience in such things or with the Crown Estate, my thoughts are about the following:

    a) Regardless of the service charges, the Crown Estate will see this as an opportunity to swipe my large deposit on a huge dilapidations bill effectively wiping me out.


    b) That a huge dilapidations bill would have to be justified and if there was any serious issue with the building then that would be claimed from buildings insurance and therefore any dilapidations would be purely cosmetic/decorative, and so, how much could a dilapidations bill possibly be!?

    I have asked the current tenant, who has enjoyed the majority of the 10 year lease to put his money where his mouth is, and so we will retain £25,000 for any dilapidation bill as I feel it is unfair for me to foot any dilapidations bill for only 9 months use!

    Please no comments about the 'buying a lease with only 9 months left' we have our reasons for that and we are comfortable with that. Thank you.

    Any help would be greatly appreciated!!


    Since funding for the Windsors changed from the civil list (plus a few others... 2 very substantial..) went to the sovereign grant (with a few others,... 2 very substantial..) the income is now based on a % of the crown estate profit: I live very close to a lot of crown estate land: They seem to have become much more interested in making money since to sovereign grant came in and her income depends on profit of the crown estate: And the crown estate profits and been growing very well recently. Funny that.

    You will be dealing with an organisation with some of the best experience, lawyers & other property expertise in the UK...
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...


      This is a problem of valuation. Solicitors are not valuers. Their duty when a client is taking a lease, whether as original tenant or assignee, is to point out the repairing obligations and the potential liability for dilapidations. They should recommend the client to consult a surveyor to advise on the condition of the property and the potential for dilapidations having regard to the terms of the lease and on what terms the transaction should proceed - assuming he does not recommend the client to walk away.


        Thanks for your responses, I appreciate it.

        If anyone else has any info, especially if you have dealt with the Crown, any info you have with regard to how they conduct themselves toward tenants, I would greatly appreciate.


          Please note the "Crown Estate" is not "The Crown": See (eg - doesn't apply in your case..) Schedule 1, Part 1, s11(2) of HA 1988...

          Crown tenancies

          11 (1) A tenancy under which the interest of the landlord belongs to Her Majesty in right of the Crown or to a government department or is held in trust for Her Majesty for the purposes of a government department.

          (2) The reference in sub-paragraph (1) above to the case where the interest of the landlord belongs to Her Majesty in right of the Crown does not include the case where that interest is under the management of the Crown Estate Commissioners or it is held by the Secretary of State as the result of the exercise by him of functions under Part III of the Housing Associations Act 1985.
          The distinctions between "The Monarch", The-Queen-as-an-Individual, "The Crown" & some state bodies (eg crown estate) is complex & not something I would like to usually comment on..
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...


            There is nothing special about the Crown Estate in this context, it's basically a government department.

            I should expect the service charge to be for the upkeep of those pats of the building that are not exclusively demised to the tenant.
            The tenant's express repairing covenant is the matter to be concerned with as regards possible dilapidations. The Lease will state what is meant by the repairing covenant and it may be worthwhile getting a surveyor to advise on what needs doing, etc. If you renew the lease then the dilapidation liability would be lessened, if not then the Schedule of Dilapidations would be terminal.


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