1. The two options
When facing a dilapidations liability, you typically have two routes:
Do the works yourself — Carry out repairs, decorations, and reinstatement before (or around) lease end, so you can hand back the property in compliant condition.
Negotiate a settlement — Accept that the property will be handed back in its current condition and pay the landlord compensation for the cost of putting it right.
Neither is inherently better. The right choice depends on your circumstances, the nature of the works, your landlord’s intentions, and the commercial realities.
2. When doing works makes sense
You can control specification and cost
If you do the works yourself, you choose the specification (within lease requirements), the contractors, and the timing. Landlords’ dilapidations costs often assume premium rates and gold-plated specifications. You might achieve the same compliance at lower cost.
Decorations in particular
Internal decorations are a prime example. A landlord might claim £15,000 for redecoration. You could commission the same work for £8,000 using your chosen contractors, at a time that suits you.
You’re staying nearby
If you’re relocating within the same area and keeping the same fit-out contractors, it may be efficient to add lease-end works to your programme.
The works are genuinely needed
For items that are clearly your liability and will have to be done anyway, doing them yourself may be cheaper than paying the landlord to do them.
You want clean exit
Handing back in compliant condition ends the matter. No negotiation, no ongoing dispute, no uncertainty. Some tenants value that certainty.
3. When paying compensation makes sense
The landlord isn’t going to do the works
This is the key question. If your landlord is planning to sell the property, redevelop it, or carry out their own refurbishment, they may not actually do the works you’d be paying for. In these cases:
- You may have supersession arguments (reducing or eliminating liability for items the landlord won’t action)
- Paying cash for works that won’t be done may feel wasteful
- A negotiated settlement can sometimes be lower than work costs
Section 18 limits your liability
If the property’s value diminution is less than the cost of works, your liability is capped at the lower figure. In this scenario, paying the capped amount (rather than the higher work cost) makes commercial sense.
The claim includes betterment
If the landlord’s specification would improve the property beyond its original condition, you can challenge that element. Cash negotiation lets you settle for actual liability, not inflated figures.
You’ve left already
If you’ve already vacated and the lease has ended, you can no longer do the works (or can only do so with the landlord’s cooperation). Settlement is your only realistic option.
Works would be disruptive
Carrying out works while still occupying can disrupt your business. Exiting and settling may be simpler.
You don’t have the resource
Managing building works requires time and expertise. If you don’t have that capacity, outsourcing via a settlement may be more practical.
Increased rent commitments
Undertaking the works could mean paying rent on two properties for a longer period while you meet your dilapidations liability on the old property and fit out your new property to meet your occupational requirements.
4. The hybrid approach
It’s not all-or-nothing. Many tenants take a hybrid approach:
Do the easy, cheap items — Clear out rubbish, basic cleaning, minor repairs that cost more to argue about than to fix.
Do decorations — Often achievable at lower cost than the claim, and removes a big-ticket item from negotiation.
Negotiate the rest — For major repairs, reinstatement, and contested items, negotiate a cash settlement.
This targets your effort and expenditure at items where doing the work clearly saves money, while negotiating items where the landlord’s figures are inflated or supersession applies.
5. Timing considerations
Before lease end
If you’re considering works, start early. You need time to:
- Understand your actual obligations
- Specify the works properly
- Procure contractors
- Complete works before handback
Rushing works leads to poor outcomes — overpaying, incomplete work, or compliance disputes.
At lease end
Most leases require the property to be yielded up in good condition. If you’re planning works, ensure they’ll be complete by the end date.
After lease end
Once the lease has ended, you generally can’t access the property to do works without the landlord’s cooperation. Your options narrow to settlement.
6. What affects the calculation
Consider these factors when deciding:
Landlord’s actual intentions — Will they do the works, sell, or redevelop?
Your cost vs their claim — Can you achieve compliance cheaper than they’re claiming?
Supersession risk — Will items be obliterated by the landlord’s planned works?
Section 18 — Is the diminution less than work costs?
Your capacity — Can you actually manage the works effectively?
Remaining time — Is there time to do works properly before lease end?
Negotiating position — Does doing some works strengthen your hand on the rest?
7. Getting advice
This decision has significant financial implications. Before committing to either approach:
Understand your actual liability — What does the lease actually require? What can legitimately be challenged?
Know the landlord’s position — What are their intentions for the property?
Get realistic costs — For works you might do, not landlord’s inflated figures.
Model the options — What’s the likely outcome of works vs settlement?
A dilapidations surveyor can advise on both the technical liability and the commercial strategy.
Key Takeaways
- Neither approach is inherently better — it depends on circumstances
- Ask: will the landlord actually do the works? — If not, is there a ‘loss’?
- Think about prioritising decoration works — you can usually beat the landlord’s price
- Major repairs often favour negotiation — especially with supersession or Section 18
- Hybrid approaches work well — do the cost-effective items, negotiate the rest
- Get advice early — the right strategy depends on facts you may not have
Need Help?
If you’re facing a dilapidations liability and trying to work out the best approach, we can help. We’ll assess your position, understand your landlord’s intentions, and advise on the strategy that best protects your interests.
Related Services:
- Dilapidations for Tenants — Expert advice and negotiation
- Contract Administration — If you decide to carry out works
- Dilapidations Assessments — Understand your position before the claim arrives
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