This week has seen me forensically vetting some NHS files to establish the original condition of a property at the time the NHS moved in and took up residence.
If there is one thing that I have come across on regular occasions when dealing with NHS leaseholds, it is where the NHS has moved teams in to a leasehold building before agreeing the lease.
Whilst this might be the answer to urgent operational requirements at the time, the risks of doing this are most likely never realised until many years down the line when the NHS decides to move out and the landlord serves a rather large dilapidations schedule and someone like me is asked to sort out the problem. It is an error that the NHS never seem to learn from and I have no idea how they might ever stop doing it.
The number of times I have wished there had been a decent schedule of condition and improvements file to help me unravel the situation regarding a dilapidation claim. Unfortunately I have found the same with improvements and that quite often NHS has made quite extensive improvements to a property without considering the contents of the lease or what might happen at the end of the term.
Some Trusts are happy to move out of a leasehold property and leave the place with the improvements in a tidy state and later argue using section 18(1) Landlord and Tenant Act 1927, but now the market is moving a little this might be foolhardy depending on location.
Having recently worked with a most excellent QS, if the original ‘base’ condition that the property was in, when it was first used by the tenant can be established, then it may be worth getting a price for the tenant NHS to do the work and comparing that price with what might have to be paid out through a dilapidation claim. Both of the options somewhat rely on there being someone ‘expert’ to negotiate / manage on behalf of the NHS to see the matter through to conclusion, so it can be a close thing financially on which option to take. Often NHS just budget for having to pay dilapidations at the end of the term simply because ‘that’s where they have the budget’ – as to strip the improvements out / undertake the dilapidations workload would be classed as a ‘Capital Project’ with all the ‘wrappings’ in terms of procurement and business cases.
I must say that perhaps I am a bit old fashioned in that I find the rise of the email/electronic file and decline of the ‘hard copy file’ can also make things difficult in these situations when trying to find correspondence relating to improvements and works over the life time of a lease. Whilst electronic filing is great for space saving, it needs to be part of a good overall office system where there is someone decent to oversee the electronic filing and ensure that the filing is (i) done correctly in an organised manner – and maintained as such, (ii) timely – so you can find what you have sent just a few days before; and (iii) that someone from IT doesn’t decide to move the files from one server to another and lose half of them and (iv) there is a decent search facility – that can also search PDF files – then you also need to be running some hard copy system alongside.
The advent of half thought out electronic filing systems, combined with the pressure on NHS to save money by streamlining admin staff – and also combined with changes of landlord and landlord information management systems over the period that a building has been occupied- means you can often end up with a rather opaque situation. Over the years I’ve come to believe that a partial hard copy filing system really does need to co-exist the electronic system.
There is nothing quite like returning to a client’s office several years further along the line and suddenly realising that they are still using the hard copy filing system that you set up several years previously to run alongside the electronic system. Picking up files with your own handwriting on in third party offices that you have not been to in many years is strange but when you see that it has worked for your client -and in the case of a dilapidation claim – is saving them a king’s ransom– well the feeling is one of quiet satisfaction.
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