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Dilapidations claims arise when a tenant fails to meet their lease obligations to repair, reinstate, or redecorate commercial premises. While commonly pursued at lease expiry, they can also arise during the term, particularly in connection with break clauses, where a landlord may challenge compliance as a way to invalidate the break.
Dilapidations can also be used tactically by landlords to gain leverage in lease renewal or exit negotiations. Whether you’re a landlord seeking to protect the value of your asset or a tenant looking to limit exposure, early legal and technical advice is key to managing risk and achieving a fair outcome.
Dilapidations claims can relate to :-
general repair obligations
decoration obligations
reinstatement of alterations
The tenant's specific obligations are determined primarily by the lease terms, interpreted through case law and modified by key legislation, particularly Section 18(1) of the Landlord and Tenant Act 1927, which limits the landlord's recoverable damages.
Dilapidations disputes commonly stem from :-
Interpretation disagreements - parties often interpret lease terms differently, especially regarding what constitutes "repair" versus "improvement," the definition of "fair wear and tear," and the scope of reinstatement obligations. For example, replacing an outdated but functional heating system might be viewed by landlords as necessary repair but by tenants as an improvement they're not obligated to make.
Condition assessment conflicts - without detailed documentation of the property's condition at lease commencement, parties may fundamentally disagree about what deterioration occurred during the tenancy. Technical evaluations are inherently subjective—what one surveyor considers normal cracking, another may view as structural disrepair requiring significant remediation.
Valuation disagreements - even when parties agree on necessary works, disputes often arise over appropriate costs, repair methodologies, and the application of the Section 18(1) valuation cap. Landlords typically prefer comprehensive approaches (full replacement), while tenants argue for more economical methods (patch repairs) that would satisfy lease obligations.
Procedural failures - technical errors in serving notices, non-compliance with the Dilapidations Protocol, inadequate documentation, or unreasonable timeframes often complicate resolution.
We support both landlords and tenants at every stage:
Reviewing Lease Terms – assess repair, reinstatement, and decoration obligations.
Advising on Strategy – practical, commercial guidance to resolve claims efficiently.
Co-ordinating with Surveyors – working with surveyors to prepare or respond to schedules.
Protocol Compliance – Ensure steps meet the Dilapidations Protocol.
Negotiation and Settlement – we are experienced in helping clients minimise fees and reach out of court agreements .
Dispute Resolution – represent clients in court or ADR if settlement fails.
Exit Planning – advise tenants on minimising exposure and landlords on preparing claims.
Early advice can significantly reduce disputes, costs, and risks.
In most commercial leases, the process is landlord-led. Following the Dilapidations Protocol helps structure claims, encourage early resolution, and minimise disputes.
Lease Review (12–18 months before expiry) - plan repairs, reinstatement, and decoration.
Interim Inspections: Identify potential breaches; tenants can remediate while still in occupation.
Pre-Terminal Survey: Assess potential breaches, quantify works, and identify new-for-old issues.
Interim Schedule (Optional): Early notice to allow tenants to address problems.
Terminal Inspection: Assess compliance and determine remedial works needed.
Terminal Schedule of Dilapidations: landlords must provide quantified claims with supporting documentation, tenants must respond comprehensively within 56 days, and both parties must consider ADR. Non-compliance may result in adverse costs consequences. Detailed, quantified list of breaches and supporting evidence needed.
Tenant Response: Complete works, dispute items, or negotiate alternatives.
Landlords, particularly large institutions, may overstate works or costs
Tenants can challenge items with independent survey evidence and Section 18(1) limits.
Negotiation or ADR: Early dialogue, Scott Schedules, and commercial settlement.
Litigation (if necessary): Court action for damages, capped by Section 18(1) limits.
If the landlord alleges the tenant has not met obligations:
Landlord may use own contractors – tenants may be liable for reasonable costs, but excessive works can be challenged.
Recovery of consequential losses – Loss of rent due to delays, supervision costs, or project management fees can be claimed if reasonable.
Tenant defences - challenge cost, necessity, or method of works; Section 18(1) limits damages; independent surveyor evidence is essential.
If you are a Landlord :-
Review lease terms thoroughly to understand the tenant's specific obligations
Consider instructing a surveyor 6-12 months before lease end
Potentially serve an interim schedule to allow tenants to remedy issues before vacating
Maintain good records and consider the tenant's financial stability when pursuing claims.
Ensure claims are realistic, properly quantified and focused on genuine breaches.
Document initial condition thoroughly and budget for dilapidations claims from lease start.
Maintain property consistently and consider completing repairs while still in occupation and budget appropriately for potential dilapidations costs.
Review obligations 12-18 months before lease expiry to understand potential liability
Consider commissioning an independent survey to identify issues early
Consider completing necessary works while still in occupation (often more cost-effective)
Get in touch
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