Quick Answer
Dilapidations are breaches of a commercial tenant’s lease obligations about the condition of the property, such as repairs, redecoration or removing alterations. They are usually dealt with at the end of a lease, when the landlord serves a schedule of dilapidations listing the work needed and its cost. In England and Wales, the landlord should generally serve this within 56 days of the lease ending, and the tenant should respond within 56 days. A landlord’s claim cannot exceed the amount the disrepair reduces the property’s value, under section 18 of the Landlord and Tenant Act 1927. Costs range from a few thousand pounds for a small unit to tens of thousands for larger buildings. A schedule of condition at the start of the lease and early advice from a chartered surveyor are the best ways to avoid a dispute.
Why Dilapidations Catch People Out
Signing a commercial lease feels like the start of something. The end of it rarely crosses anyone’s mind.
Then, five or ten years later, a document lands on the tenant’s desk listing every scuff, stain and missing ceiling tile, with a price next to each one. For some businesses, that bill is the biggest single cost of leaving a property.
Landlords get caught out too. Serve a schedule late, overstate the claim or ignore the protocol, and a perfectly valid claim can be cut down or lost.
Think of it like returning a hire van. If you agreed to bring it back clean and undamaged, you pay for anything that isn’t. The difference with property is that the “van” might be a 20,000 square foot warehouse, and the rental agreement runs to 80 pages.
At Rory Mack Associates, our RICS-regulated surveyors have advised landlords and tenants across Stoke-on-Trent, Staffordshire and the Midlands on dilapidations since 1992. This guide explains how it all works, what it costs and how to stay out of a dispute.
What Are Dilapidations?
In everyday English, “dilapidation” just means a building in a state of disrepair. In commercial property, the word has a more specific meaning.
Dilapidations are breaches of the lease covenants that relate to the condition of the property. If the lease says the tenant must keep the building in repair, and they don’t, that’s a dilapidation.
Most claims come from four types of lease obligations:
- Repair: keeping the building and its fixtures in good repair. On a full repairing and insuring (FRI) lease, this can cover the roof, structure and services, not just the inside.
- Redecoration: many leases require the tenant to redecorate at set intervals and in the last year of the lease.
- Reinstatement: removing alterations the tenant made, such as partition walls, mezzanines or signage, and putting the building back as it was.
- Statutory compliance: meeting legal requirements that the lease places on the tenant, such as fire safety or electrical testing.
The exact obligations depend entirely on the wording of your lease. Two units on the same estate can have very different liabilities.
When Can Dilapidations Arise?
Dilapidations can come up at three points in a lease.
At the start: the schedule of condition
Before the lease is signed, a schedule of condition records the state of the building with written notes and photographs. If the lease is linked to it, the tenant only has to return the building in that condition, not a better one. This is the tenant’s best protection. Our leaseholder’s guide to schedules of condition and dilapidations explains how they work together.
During the lease: interim dilapidations
If a building falls into disrepair while the lease is running, the landlord can act before the end of the term. Options include serving a schedule of interim repairs, or using a clause that lets the landlord enter, carry out the work and recover the cost from the tenant.
There are extra protections for tenants. Where the original lease was for seven years or more and at least three years remain, the Leasehold Property (Repairs) Act 1938 can restrict a landlord’s damages claim and may require court permission first.
At the end: terminal dilapidations
This is the most common type. As the lease ends, the landlord serves a schedule of dilapidations setting out what the tenant should have done and what it will cost to put right.
What Is a Schedule of Dilapidations?
A schedule of dilapidations is a document, usually prepared by a chartered surveyor for the landlord, that lists every alleged breach of the lease. A good schedule will:
- Quote the relevant lease clauses
- Describe each breach and its location
- Set out the work needed to remedy it, such as repairs, redecoration or removing alterations
- Give a cost for each item
Alongside it, the landlord sends a quantified demand. This is the actual sum they’re claiming, which should reflect their real loss, not simply the cost of every item on the schedule. That difference matters, as you’ll see below.
It can range from minor items like filling holes and touching up paint, to replacing a roof covering or stripping out a full office fit-out.
The Dilapidations Process, Step by Step
In England and Wales, end-of-lease claims follow the Dilapidations Protocol, a pre-action protocol under the Civil Procedure Rules. Courts expect both sides to follow it, and can penalise those who don’t.
| Stage | What happens | Typical timing |
| 1. Preparation | Landlord instructs a surveyor to inspect and draft the schedule | At least 6 months before the lease ends |
| 2. Schedule served | Landlord sends the schedule of dilapidations and quantified demand | Generally within 56 days after the lease ends |
| 3. Tenant responds | Tenant replies item by item, usually with their own surveyor | Generally within 56 days of the quantified demand |
| 4. Meeting | Both sides meet, without prejudice, to narrow the issues | Generally within 28 days of the tenant’s response |
| 5. Settlement or proceedings | Most claims settle. If not, the landlord gives a final breakdown before issuing proceedings | Varies |
A schedule can be served before the lease ends, but the landlord must then confirm or update it once the lease has actually ended.
The Legal Limits on a Dilapidations Claim
This is the part many landlords miss, and many tenants never hear about.
The section 18 cap
Under section 18(1) of the Landlord and Tenant Act 1927, damages for breach of a repairing covenant cannot exceed the amount by which the disrepair reduces the value of the landlord’s interest. This is known as “diminution in value”.
So if the repairs cost £60,000 but the building is only worth £20,000 less because of them, the claim is capped at £20,000.
When repairs would be pointless
Section 18 also means a landlord can’t claim for repairs if they plan to demolish the building, or alter it so much that the repairs would be wasted, at or shortly after the end of the lease. If you’re a tenant and your landlord is planning a redevelopment, that’s worth knowing.
Carrying out the works, or not
A landlord who actually does the work and spends the money is in a stronger position. If the work isn’t done, and won’t be, the claim will usually rest on a diminution valuation. A good commercial valuation can make or break that argument for either side.
I’ve Received a Schedule of Dilapidations. What Now?
Don’t panic, and don’t pay it straight away. The first figure is rarely the final one.
- Read your lease. The schedule should quote it. Check the clauses actually say what the landlord claims.
- Dig out your schedule of condition. If the lease refers to one, you can’t be asked to return the building in better condition than you found it.
- Appoint your own surveyor. An independent chartered surveyor will check each item, challenge anything that isn’t your responsibility, and test the costs against market rates.
- Consider the section 18 cap. If the building’s value hasn’t really dropped, the claim may be worth far less than the schedule suggests.
- Respond on time. Stick to the protocol timetable. Ignoring a schedule only weakens your position.
- Bring in a solicitor if needed. For larger or disputed claims, a property litigation solicitor works alongside your surveyor.
A warning about break clauses
If you plan to end your lease early using a break clause, check whether the break is conditional on complying with your repair obligations. If it is, even small breaches could mean the break fails and you’re stuck with the lease. Get advice well before the break date.
How Much Do Dilapidations Cost?
There’s no standard figure. A small shop that’s been well looked after might face a bill of a few thousand pounds. A large warehouse or a heavily altered office can run to tens of thousands, sometimes more.
The main things that drive the cost are:
- The extent of disrepair. Scuffed paintwork and worn carpets are cheap to put right. Roof repairs, damaged services or structural problems are not.
- Alterations to remove. Stripping out partitions, mezzanines, kitchens or specialist equipment adds up quickly.
- Size and type of property. More floor space means more work.
- Professional fees. Surveyors’ and legal fees on both sides, especially if the claim is disputed.
- Loss of rent. If the building can’t be relet until works are done, the landlord may claim for the empty period.
- The lease itself. A full repairing lease with no schedule of condition puts far more on the tenant than one tied to a schedule.
A real-world example
Picture a print business leaving a light industrial unit in Longton after a ten-year FRI lease. The landlord’s surveyor serves a schedule claiming £48,000: £18,000 for roof repairs, £15,000 to remove a mezzanine and office partitions, £9,000 for redecoration and £6,000 for loss of rent.
The tenant appoints their own surveyor, who finds three things:
- The roof was already in poor condition at the start, and the schedule of condition proves it. That knocks out most of the roof claim.
- The landlord’s agent says the next tenant would actually want to keep the mezzanine, so removing it doesn’t reduce the building’s value.
- Some of the redecoration costs are well above local market rates.
After a meeting, the claim settles at around £14,000. Same building, same lease. The difference was preparation and a proper response.
The lesson works both ways. A landlord with a well-prepared, realistic claim is far more likely to recover it quickly, without a costly argument.
Advice for Landlords
Dilapidations protect the value of your building and make sure it’s lettable when the tenant leaves. To get the most from them:
- Get the lease right. Be clear about repair, redecoration and reinstatement obligations from day one. Our guide to what commercial leases you can get in the UK covers the main types.
- Agree a schedule of condition. It feels like it helps the tenant, but it also prevents arguments later.
- Inspect during the lease. Regular inspections catch problems early. Dealing with them as interim dilapidations is usually cheaper than waiting.
- Start early. Instruct a surveyor at least six months before the lease ends.
- Claim your real loss. An inflated claim invites a fight and can be penalised. A realistic one gets settled.
- Follow the protocol. Missing the timetable or skipping steps weakens your position in court.
If you’d rather not handle any of this yourself, our property management team carries out regular inspections and keeps a record of condition throughout the lease. For buildings with shared areas, dilapidations often overlap with service charges and communal repairs, which our block management service covers too.
Advice for Tenants
The best time to deal with dilapidations is before you sign. The second best is long before you leave.
- Negotiate before you sign. Ask for repair obligations to be limited to the building’s condition at the start, backed by a schedule of condition.
- Know your lease. Repair, redecoration and reinstatement clauses vary widely. Read them, or get someone to read them for you. See navigating lease agreements for the basics.
- Keep on top of repairs. Small, regular maintenance costs far less than a big bill at the end. Our autumn maintenance checklist is a good start.
- Keep records. Photos, invoices and any consents for alterations are all valuable evidence.
- Budget for the end. Set money aside each year for exit costs, just as you would for any other liability.
- Plan any lease renewal. Dilapidations can sometimes be negotiated as part of a lease renewal instead of being paid at exit.
How to Avoid a Dilapidations Dispute
Most disputes come from surprise. The more both sides know early, the less there is to argue about.
- Talk early. A conversation a year before the lease ends can save months of correspondence later.
- Inspect together. A joint inspection near the end of the lease narrows the issues straight away.
- Use independent professionals. Surveyors who follow RICS professional guidance give both sides a fair, realistic starting point.
- Be willing to settle. Litigation is expensive and slow. Most claims are best resolved by negotiation.
How Rory Mack Associates Can Help
Our RICS-regulated chartered surveyors act for both landlords and tenants on dilapidations across Stoke-on-Trent, Staffordshire, Cheshire and Shropshire. We can:
- Prepare schedules of condition before a lease starts
- Prepare or respond to interim and terminal schedules of dilapidations
- Cost works against current local market rates
- Provide diminution valuations
- Negotiate settlements in line with the Dilapidations Protocol
Summary
Dilapidations are the cost of putting a commercial property back into the condition the lease requires. They usually come up at the end of a lease, through a schedule of dilapidations, but can arise during the term too. Claims follow the Dilapidations Protocol, with 56-day timescales for the schedule and the response, and are capped by section 18 at the drop in the property’s value. For tenants, a schedule of condition and good maintenance are the best protection. For landlords, an early, realistic claim is the quickest route to settlement.
Whether you’re serving a schedule or have just received one, speak to our dilapidations team on 01782 715725.
This guide is general information and not legal advice. Always take advice on your specific lease.
Frequently Asked Questions
Usually the tenant, but only for breaches of their lease obligations. If the lease limits repairs to the condition shown in a schedule of condition, the tenant doesn’t have to fix problems that existed before they moved in. Fair wear and tear may also be excluded, depending on the lease wording.
Under the Dilapidations Protocol, the landlord should generally serve the schedule and quantified demand within 56 days after the lease ends. It can be served earlier, often in the last year or so of the lease, but must then be confirmed or updated once the lease has ended.
Yes. Many claims settle with a cash payment rather than the tenant carrying out repairs. This often suits both sides, as the landlord can then plan works around a new tenant. The amount is still limited to the landlord’s actual loss.
A schedule of condition records the state of the property at the start of a lease. A schedule of dilapidations lists the breaches of the lease and the cost to put them right, usually at the end. The first is the tenant’s evidence. The second is the landlord’s claim.
The term is mainly used for commercial leases. Residential tenancies deal with condition through the deposit and check-out process instead. Long residential leases can contain repair covenants, and the landlord can enforce those, but “dilapidations” in the sense used in this guide almost always means commercial property.
