THE AGENTS

Chris Platts

Partner, Brownill Vickers

and Platts

Following Peter Coulson's recent article on the possible sources of conflict when a tenancy ends, my own firm is involved in both of the areas he mentions, operating a large team of dilapidation surveyors and also the biggest team of fixtures

and fittings (F&F) valuers in the UK.

I have been an F&F valuer for 20 years and my firm can trace its roots back as far as 1884. There is no black magic involved in this area of licensed property surveying. It is a system that has been used for hundreds of years, is tested by case law and is, ultimately, a very fair method by which the assets of a pub business change hands.

Instances when the fixtures and fittings require to be valued include tenancy changeover, on grant of a new lease, on lease assignment for apportionment of the sale price for tax, for depreciation purposes, on lease surrender or for re-financing. Inventory items are second-hand, some items maybe of little or no value at all and, although constantly depreciating, they do have an in-situ going-concern value.

With regard to the thorny issue of dilapidations, it is the surveyor's role to determine the extent of the repair liability under the agreement and identify areas that require repair, reinstatement or redecoration. A schedule of necessary works is prepared, which may be priced having regard to the BCIS rates. The schedule of dilapidations is then served on the tenant, allowing them sufficient time to do the works.

The system cannot be more transparent when operated correctly. The agreement details the extent of the repair liability, and the surveyor identifies the areas of dilapidation and a period of time in which to undertake the works is allowed. Tenants may also take advice from their own surveyors.

It is interesting to note that we are being called upon more frequently to prepare schedules of condition prior to entering into agreements to lease. This allows both parties to have

a clearer understanding of current items of disrepair and likely future dilapidations from the outset.

Finally, let's consider security deposits, held primarily for two reasons: to allow credit terms for stock purchases and to be held against any future debt, however it is caused during the term of the agreement - for rent, stock purchases or dilapidations. Monies can only be held back against dilapidations when the pre-identified works have not been completed or have not been done to a satisfactory standard.