1. What are dilapidations?
Dilapidations are breaches of a tenant’s lease obligations relating to property condition. Most commercial leases require tenants to repair, maintain, decorate, and reinstate premises throughout the term and when yielding up at lease end.
When a tenant fails to meet these obligations — whether through neglect, wear and tear beyond normal use, or simply not doing required works — the landlord has a claim for compensation.
The claim is documented in a Schedule of Dilapidations: a formal, item-by-item list of breaches with associated costs. This is served on the tenant, triggering a negotiation that typically results in a financial settlement.
2. Understanding your entitlement
Your entitlement comes from the lease, not from what you think is fair or what the property “should” look like. The lease defines:
Repairing obligations — What standard of repair is the tenant required to maintain? Full repairing lease? Internal only? Reference to a Schedule of Condition?
Decoration obligations — How often must the tenant decorate? Interior and exterior? To a specification?
Reinstatement obligations — Must alterations be removed at lease end? All alterations, or only those not approved by licence? Does the lease require the landlord to ask for the alterations to be removed.
Yielding up provisions — What condition must the property be in when handed back?
Your claim can only include items that breach these specific obligations. A professionally prepared schedule carefully references each item to the relevant lease clause.
3. Types of schedule
There are three types of dilapidations schedule, each serving a different purpose:
Interim Schedule of Dilapidations — Served during the lease term when ongoing breaches are causing damage or deterioration that shouldn’t wait until lease end. Typically limited to repair items, not decoration or reinstatement.
Terminal Schedule of Dilapidations — The main event. Served shortly before or at lease expiry, covering all breaches: repairs, decorations, reinstatement, and compliance matters.
Final Schedule of Dilapidations — Served after the lease has ended. Similar to a terminal schedule, but the tenant no longer has the right to carry out the works themselves — the claim is for compensation only.
Most landlords serve a terminal schedule, giving the tenant notice of the claim while they still have the option (in theory) to do works.
4. When to start
Ideally: 12-18 months before lease expiry. This gives time to:
- Review the lease and understand your entitlements
- Inspect the property and assess likely claim value
- Prepare documentation and strategy
- Signal to the tenant that you’re taking this seriously
Early engagement often produces better outcomes. Tenants who know a claim is coming may carry out some works, reducing the eventual claim but also the eventual dispute.
At minimum: before the lease ends. Serving a terminal schedule before expiry is preferable to a final schedule after.
At latest: within 56 days of lease expiry. The Dilapidations Protocol recommends landlords serve their claim within this window. Delays weaken your position.
Absolute deadline: 6 years from lease end. The Limitation Act allows claims up to 6 years after the cause of action arises. But the longer you wait, the harder it becomes to evidence your position and the weaker your leverage.
5. The process step by step
Step 1: Lease review
We analyse your lease to understand exactly what the tenant is obligated to do. We also review ancillary documents: licences for alterations, side letters, any Schedule of Condition.
Step 2: Inspection
We inspect the property in detail, assessing condition against lease requirements. Every breach is documented with photographs and descriptions.
Step 3: Schedule preparation
We prepare a formal Schedule of Dilapidations compliant with the Dilapidations Protocol. This sets out each breach, the clause breached, the works required to remedy it, and the cost.
Step 4: Quantification
We support each item with appropriate cost evidence. Vague or unsupported figures get challenged; properly evidenced costs are harder to dispute.
Step 5: Service
We serve the schedule on the tenant or their surveyor in accordance with the Protocol.
Step 6: Negotiation
The tenant’s surveyor responds, challenging items they consider invalid or inflated. We negotiate item by item toward an agreed position.
Step 7: Settlement
Most claims settle through surveyor negotiation. We work toward the best achievable outcome for you.
6. Understanding the limitations on your claim
Your claim isn’t unlimited. Two statutory caps are particularly important:
Section 18 (Diminution)
Section 18 of the Landlord and Tenant Act 1927 caps your claim at the reduction in the property’s value caused by the tenant’s breaches. If repair breaches reduce the property’s value by £50,000, your claim for repairs can’t exceed £50,000 — even if the works would cost £100,000.
This typically matters when repair costs are high relative to property value, or when the property is being sold or re-let regardless of condition.
Supersession
If you’re planning to demolish the building, substantially redevelop it, or carry out works that would remove the defects anyway, your claim may be reduced or extinguished. Courts won’t allow landlords to recover costs for works they were never going to do.
This doesn’t mean you can’t claim if you have future plans — but those plans affect claim value and must be navigated carefully.
7. Why professional preparation matters
Tenants scrutinise dilapidations claims looking for weaknesses:
- Items that aren’t actually lease breaches
- Costs that are inflated or unsupported
- Works that would result in betterment
- Claims affected by diminution or supersession
A poorly prepared schedule invites challenge. A professionally prepared schedule — properly referenced to lease clauses, supported by evidence, realistic on costs — is much harder to pick apart.
The difference between a strong claim and a weak one can be tens of thousands of pounds in settlement.
8. Common mistakes to avoid
Starting too late — Rushing to prepare a schedule under time pressure produces weaker documents.
Overreaching — Including items that aren’t genuine lease breaches damages your credibility and invites wholesale challenge.
Inflated costs — Gold-plated specifications and premium contractor rates get challenged. Reasonable, evidenced costs are defensible.
Ignoring the Schedule of Condition — If one exists, claims for items covered by it will fail. Review it before you start.
Forgetting supersession — If you’re planning works or disposal that would remove defects, factor this into your strategy from the start.
Poor documentation — Photographs, records, evidence. Without them, it’s your word against the tenant’s.
Key Takeaways
- Your entitlement comes from the lease — review it carefully before starting
- Start early — 12-18 months before lease expiry is ideal
- Serve within 56 days of expiry — delays weaken your position
- Understand the caps — Section 18 and supersession limit what you can recover
- Prepare professionally — weak schedules invite challenge
- Expect negotiation — the initial claim is rarely the final figure
Need Help?
If your tenant’s lease is approaching expiry, we can help you understand your position and prepare an effective claim. We handle everything from lease review through to negotiated settlement.
Related Services:
- Dilapidations for Landlords — Full claim preparation and negotiation
- Interim Schedules for Landlords — Mid-lease schedules for ongoing breaches
- Schedules of Condition for Landlords — Protecting your position at lease start
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