Claims against commercial tenants for damages for dilapidations will often include an amount, or notional amount, for ‘loss of rent’. This is usually formulated with reference to the income said to have been lost by the landlord during the period over which the repair works took place or will take place.
In the case of Joyner –v- Weeks [1891] 2 QB 31 the Court confirmed that the general rule at common law is that the measure of damages for breach of covenant to repair by a tenant is the cost of putting the premises into the state of repair required by the covenant. This is irrespective of whether the costs are comparable to the landlord’s actual loss. This differs from ‘loss of rent’ which is only recoverable at common law where it genuinely equates to the landlord’s loss. If the landlord would not have been able to re-let the premises, even if it had been yielded up in repair by the tenant, loss of rent will not usually be recoverable as part of a dilapidation claim.
It therefore follows that a claim for loss of rent as part of a dilapidation claim should be calculated with care. The Court’s position is that a landlord should not simply refer to the period of time it took to relet the premises. Instead, consideration should be given to the reasonable amount of time the landlord would have taken to carry out the works. This may of course be an entirely different time period than the landlord actually took to re-let the premises.
Although a loss of rent claim can be included in a dilapidation claim, the sum is still subject to the cap imposed by section 18(1) of the Landlord and Tenant Act 1927. In summary, this provides that the landlord’s total damages are limited to the diminution in value of the reversion. If the disrepair has not resulted in any diminution in value of the reversion, no damages will be payable to the landlord.
If you need assistance with a dilapidation claim please contact Ben Jones in our dispute resolution team on 01872 265100 or drt@stephens-scown.co.uk.