Dilapidations are breaches of the repair, decoration and reinstatement obligations set out in a commercial lease, together with the financial claim a landlord can make to put those items right. In plain terms, they cover the gap between the condition your premises are actually in and the condition your lease says they should be in when the property is handed back.
Getting dilapidations wrong can be expensive for both sides. This guide explains what dilapidations are, how a schedule of dilapidations works, what the law actually allows a landlord to recover, and how you can protect your position. As an RICS regulated practice with more than 35 years of experience, Simmons Taylor Hall advises landlords and tenants across London and the South East on exactly these issues.
What Are Dilapidations? A Simple Definition
A commercial lease almost always places duties on the tenant to keep the property in good repair, to redecorate at set intervals, and to remove any alterations at the end of the term. When a tenant does not meet these duties, the outstanding items are known as dilapidations.
The word covers three main areas. Repair deals with the physical condition of the building, from the roof and structure through to floors, windows and services. Decoration covers internal, and sometimes external, redecoration, often on a fixed cycle. Reinstatement means returning the property to its original layout by taking out partitions, fittings or other changes the tenant made during the lease.
Because dilapidations sit where property, law and construction meet, they are often misunderstood. A clear grasp of your lease is the starting point for any sensible discussion. If you are already facing a claim, our guide to what a dilapidation case involves makes a useful companion read.
Common Examples of Dilapidations
Dilapidations vary from one property to the next, but some issues come up again and again. Typical examples include:
- Worn or damaged flooring, ceilings and internal finishes that go beyond fair wear and tear.
- Roof defects, water damage and problems with the wider building fabric.
- Heating, air conditioning and electrical systems left in poor working order.
- Partitions, kitchens or specialist fit out installed by the tenant but never removed.
- Missed redecoration where the lease required it during or at the end of the term.
Fair wear and tear is an important idea here. Most leases accept that a property will show reasonable signs of use over time, so not every mark counts as a dilapidation. Where the line falls is often a matter of professional judgement, which is one reason an independent survey carries so much weight.
The Schedule of Dilapidations Explained
A schedule of dilapidations is the formal document that lists the alleged breaches, the works needed to put them right, and usually an estimate of the cost. It is normally prepared by a chartered building surveyor and forms the backbone of any claim. There are three common types, and knowing which one you are dealing with matters.
Interim Schedule of Dilapidations
An interim schedule is served while the lease is still running. Landlords use it to prompt a tenant to carry out repairs during the term, especially where disrepair is getting worse or starting to affect the value of the building.
Terminal Schedule of Dilapidations
A terminal schedule is prepared at or near the end of the lease. This is the most common type and sets out everything the landlord says the tenant must address before, or shortly after, giving the property back.
Final Schedule of Dilapidations
A final schedule is issued after the lease has ended and the tenant has left. By this stage the landlord knows the true condition of the property and can confirm the works and costs being claimed.
Whichever type applies, the quality of the schedule matters. One that reflects the lease and the real condition of the building is far easier to resolve than a vague or inflated one. Our schedule of condition services are often the best defence against an unfair schedule, a point we return to below.
How the Dilapidations Process Works
Most commercial dilapidations follow a recognised route. At the end of the lease the landlord serves a schedule alongside a Quantified Demand, which sets out the sums being claimed. The tenant then responds, either agreeing items, disputing them, or offering to carry out works instead of paying.
In England and Wales, terminal dilapidations claims are governed by a formal process known as the Dilapidations Protocol, which sits within the Civil Procedure Rules. You can read the full Dilapidations Protocol on the Ministry of Justice. It encourages both parties to share information early, sets standards for the schedule and demand, and pushes them towards settlement before any court claim is issued. Courts expect the protocol to be followed and can penalise a party that ignores it.
Most claims settle by negotiation, often with surveyors acting for each side. Reaching a fair figure depends on getting the facts right, which again comes back to accurate evidence and sound advice.
Section 18 and the Legal Limit on a Landlord’s Claim
A common misconception is that a landlord can simply add up the cost of every repair and send the tenant the bill. In reality, the amount recoverable for terminal dilapidations is capped by Section 18 of the Landlord and Tenant Act 1927.
Section 18 has two parts. The first limits damages to the reduction in the value of the landlord’s interest in the property caused by the disrepair, rather than the raw cost of the works. The second prevents a claim altogether where the property is going to be demolished or substantially altered soon after the lease ends, since the repairs would serve no purpose. This second point is closely tied to a principle called supersession, where planned works by the landlord cancel out repairs the tenant would otherwise owe. You can review the wording of Section 18 on the official legislation.
Because these rules can change the size of a claim so dramatically, they sit at the heart of many disputes. Given how much money can turn on the detail, both landlords and tenants should take professional advice before agreeing or paying any figure.
How to Reduce Your Dilapidations Liability
Whether you are a landlord or a tenant, the outcome of a dilapidations claim usually reflects how well you prepared. A few practical steps make a real difference. If you are a tenant, it pays to:
- Agree a schedule of condition at the start of the lease, so the property’s state on day one is on record and can limit what you are asked to put right later.
- Read your repairing and reinstatement clauses carefully before you sign, and keep any licence for alterations paperwork, as these documents shape what you must remove or leave in place.
- Take advice well before the lease ends, rather than after a claim lands on your desk.
Landlords benefit from making sure schedules are accurate, realistic and protocol compliant, and from thinking about their own plans for the building, since future works can affect what they are entitled to claim. Acting early almost always costs less than reacting late.
Why Use a Chartered Building Surveyor for Dilapidations?
Dilapidations bring together lease interpretation, building knowledge and negotiation, so specialist advice tends to pay for itself. A chartered surveyor can prepare or challenge a schedule, judge whether items are genuinely the tenant’s responsibility, advise on Section 18 and supersession, and negotiate a settlement that reflects the true position. At Simmons Taylor Hall, our building surveying team acts for both landlords and tenants, which gives us a clear view from both sides of the table. We also provide defect diagnosis and repair advice where the condition of a building is in question. As an RICS regulated firm with more than three decades of experience across London and the South East, we focus on fair, evidence based outcomes rather than drawn out disputes.
Frequently Asked Questions
What Is the Difference Between Dilapidations and a Schedule of Condition?
Dilapidations are the breaches of your lease obligations and the claim that follows. A schedule of condition is a record of the property’s state at the start of the lease. A good schedule of condition can limit your dilapidations liability by proving what was already worn or damaged before you moved in.
Who Pays for Dilapidations?
The tenant is usually responsible for the cost of putting right their own breaches, either by carrying out the works or by paying damages to the landlord. The exact liability depends on the lease and on the limits set by Section 18.
How Are Dilapidations Costs Calculated?
Costs start with the works needed to meet the lease obligations, then get tested against the reduction in the value of the landlord’s interest under Section 18. This is why the headline repair cost and the final settlement figure are often very different.
Can a Tenant Dispute a Dilapidations Claim?
Yes. Tenants can challenge whether items are truly their responsibility, question the costings, and rely on defences such as supersession or a schedule of condition. Many claims are reduced significantly through negotiation.
Do Dilapidations Apply to Residential Property?
The term is used mainly for commercial leases. Residential tenancies involve repair and disrepair too, but they fall under different rules and a separate protocol. The guidance in this article relates to commercial property in England and Wales.
Speak to Simmons Taylor Hall About Your Dilapidations
Whether you have received a schedule, need one prepared, or simply want to understand your position before a lease ends, our chartered surveyors can help with clear, practical advice designed to protect your interests and keep costs down. Call us on 020 8541 4111 or get in touch through our website to arrange your free initial consultation.
