Dilapidations. When a refurb, err, isn't
I've done several pub refurbishments. All tied. But they all had the signature of decades of previous bad quality Courage refurbishments going as deep as the layers of wallpaper, fabric, paint, wood, board and tiling covering every surface. Cabling buried under two, three, sometimes six layers of decor. Unbelievable. New wiring and gas pipes taken off old mains - no attempt whatsoever to upgrade essential building services. These pubs have been abused by most owners since the second world war. And THEN they got the asset strippers onto them and tenants who did not have the resources to bring them up to code.
One situation had a thick mains cable running into the private accommodation - I noticed one day, as I leant on the wall in the lobby to the flat chatting to a friend at the door, the supply was too hot to physically touch with bare skin. I thought this was the mains into the flat but NO. It was a thirty metres long run, as hot as that for all its length up by the ceiling, that was coming OUT of the domestic supply in the flat to serve a ring main in the commercial kitchen. That was part of my fully repairing and insuring responsibility as was upgrading a 15mm water main and the water tanks that ran dry every Friday and Saturday night because they were domestic, the surveyor who cost a thousand quid or so hadn't spotted any of those things. Mea culpa caveat emptor innit.
Basically if a pub has been done up in the last thirty years at all they have botch job stamped all over them. Every inch.
In one pub we started taking the floors up and inspecting the walls: found a whole outdoor space, surrounded by building like a lift shaft, that had been completely bricked and boarded up when women's toilets had been put in years before.
Another pub I was inspired to leave all the tiling on the toilet walls by discovering there was a layer of tiles beneath the ones I'd planned to skip, and a layer of tongue and groove underneath those. I just cut the job time in half and the budget by a third and covered the whole lot with stainless steel sheeting on one side and new tongue and groove on the other. The room was about two inches smaller all round than it should have been but hey. Who the hell cared? No one. Except me. Because I knew.
Keith Sutcliffe asked, on Facebook:
ReplyDelete'How can they charge for dilapidations when they are pulling the pub down after tenant goes bust?'
When a tenant is hit up for dilapidations after they have thrown the towel in - the dilaps are just added to the outstanding trade and rent debt the tenant owes the pubco which is a matter for the Official Receiver when the tenant isn't there to fight their case. When a tenant is being bankrupted what, in all seriousness, does the amount of pubco debt attributed to the tenant matter to that tenant? Out for a penny out for a pound. Makes no difference. If the tenant has assets, such as a home, they will be attacked to recompense the creditors and it's up to the tenant to argue the toss with the court about the level of the losses in the Administration Statement of Affairs. If the tenant is going to lose everything anyway, it's academic to them that the pubco will get 11p in the £1 rather than 6p in the £1. If the tenant has no assets, the Pubco declares the loss as high as possible and gets tax relief against profits. I imagine. I have not any proof.
Whichever the case - the pubco wins both ways. They are the croupier.
ReplyDeleteI'd like to edit the above posts to this one. But don't know if that is possible.
ReplyDeleteWhen a tenant is hit up for dilapidations after they have thrown the towel in - the dilaps are just added to the outstanding trade and rent debt the tenant owes the pubco which is a matter for the Official Receiver when the tenant isn't there to fight their case.
When a tenant is being bankrupted what, in all seriousness, does the amount of pubco debt attributed to the tenant matter to that tenant? Out for a penny out for a pound. Makes no difference.
If the tenant has assets, such as a home, they will be attacked - seized and sold - to recompense the creditors at which point it's up to the tenant to argue the toss with the court about the level of the losses in the Administrator's Statement of Affairs.
If the tenant is going to lose everything anyway, it's academic to them that the pubco / other creditors may get 6p in the £1 rather than 26p in the £1. If the tenant has no assets, the Pubco declares the loss as high as possible and gets tax relief against profits. I imagine. I have not any proof.
Whichever the case - the pubco wins both ways. They are the croupier. And the House. And the security on the door.