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ChallengeWith a lease expiry anticipated, a strategic report was commissioned to provide an assessment of the anticipated liability. Reports were commissioned from structural and services engineers with the assessed liability considered in the order of £1.5 million (excluding loss of rent).
SolutionJones Lang LaSalle subsequently developed a strategy to manage the liability of the intermediate tenant. Programmes of planned preventative maintenance works were undertaken in the last three years of the term. This included structural investigations and repairs into stonework cracking then a programme of external redecoration in the final year of the term.
Nine months before the lease expiry, Schedules of Dilapidations were prepared against the subtenants, whilst negotiations were held with the agent acting on behalf of the Superior Landlord.
ResultsThe residual financial settlement to the £1.5 million claim submitted by the Landlord was offset largely by the sub-tenant claims and lease renewals. The quantum of settlement was in the order of £40,000 and this was agreed a month ahead of the lease expiry.