Solar Building, Doxford Park

Location: Solar Building, Doxford Park, Sunderland, Tyne & Wear

Project Manager: Ben Hunter, BSc. Hons, MRICS

Scope: Schedule of Condition

Client: Energy Compare Ltd

An innovative building with solar panels from 1999

This building was constructed in 1999 and was innovative for the time, including photovoltaics within the design of the front elevation. The building provides 36,823 sq ft of office space overall and is now over 25 years old. This presents several maintenance issues for certain elements of the building, particularly mechanical and electrical installations.

A new tenant providing local employment

The building was let to a tenant who no longer required the building. Our client was interested in taking occupation of the building to open a large call centre and create around 470 jobs in the local area. One of their biggest concerns about committing to the building was being held responsible for the repair costs. Many elements of the building were approaching the end of the designed life expectancy.

Understanding dilapidations liability in a commercial lease

After discussing our client’s options for securing this property, we were instructed to undertake an appraisal of the dilapidations’ liability under the terms of the current tenant’s lease. This would quantify the amount the current tenant would have to pay to the Landlord in settlement of its historical repair obligations under its lease. Once this figure was quantified, the current tenant would pay the Landlord to terminate their lease and leave the property. This gave our client the option to commence negotiations for a new lease on their terms, with particular reference to the repair obligations.

Older office buildings present a greater risk

We worked with specialist Mechanical and Electrical engineers to establish a full picture of the current state and condition. This included both the fabric of the building and the M&E installations within it.

Our client then used our report and figures to negotiate a deal for occupation, avoiding the historic liabilities and requesting that certain elements be repaired before they moved in. This gave them security and certainty when considering their financial commitments and liabilities when entering into the lease. This could also be factored into their overall business plan.

How a dilapidations appraisal protects incoming tenants

We then prepared a detailed Schedule of Condition and a photographic record of every element of the building to document the current condition. This was attached to their new lease to help limit their repair obligations to ‘no worse condition than the current condition’ – as recorded in the Schedule of Condition.

We would always recommend that any business considering taking on a new property commission a Schedule of Condition. It can significantly help limit the financial burden and obligations associated with being a commercial tenant.