What is a Dilapidations Assessment?
A Dilapidations Assessment — sometimes called a Dilapidations Liability Assessment or Budget Cost Assessment — is a professional estimate of what you’re likely to owe when your lease ends. It’s prepared during the lease term, typically 2-5 years before expiry, giving you time to plan.
We review your lease obligations, inspect the property against those requirements, and estimate the costs of items likely to appear in your landlord’s terminal schedule. The result is a budget figure you can use for financial planning, property decisions, and proactive liability management.
Why plan ahead?
Dilapidations claims often come as a shock. Tenants who haven’t thought about lease-end costs suddenly receive a schedule claiming tens or hundreds of thousands of pounds. Budgets are blown, decisions are reactive, and negotiations happen under pressure. If a lease end is on the horizon, get an assessment now — knowing the number early is what gives you options.
An assessment changes that dynamic:
You know what’s coming
No surprises when the landlord’s schedule arrives. You’ve already seen the likely items and costs.
You can budget accurately
Finance teams can provision appropriately. Cash flow isn’t disrupted by an unexpected bill.
You have time to act
Some works are cheaper done proactively than as part of a lease-end settlement. Others can be phased. With advance warning, you have options.
You negotiate from knowledge
When the claim arrives, you already understand your position. You’re not reacting blindly to the landlord’s figures.
Who needs this?
You should commission a Dilapidations Assessment if:
- Your lease expires in the next 2-5 years
- You’re budgeting for future property costs
- You’re considering renewing vs relocating and need to factor in exit costs
- You’re thinking about exercising a break clause
- You manage multiple properties and need portfolio-wide liability visibility
- Your finance team needs to provision for lease-end costs
The assessment is particularly valuable for corporate occupiers with accounting obligations around property provisions.
The FRS 102 connection
Under Financial Reporting Standard 102, businesses must recognise provisions for liabilities they’re committed to. Dilapidations liability exists from lease commencement — it accrues over the term. In simple terms, a dilapidations assessment cost can be offset against your profits, and in doing so can reduce your corporation tax bill.
A professional Dilapidations Assessment supports your financial reporting by:
- Quantifying the liability for provisioning purposes
- Providing evidence for auditors
- Supporting the annual review of provisions
- Demonstrating proper financial management
If your business has reporting obligations, an assessment isn’t just useful — it may be necessary for compliant accounts.
When to do it
2-5 years before lease expiry
This is the sweet spot. Far enough out to allow planning and action, close enough that the assessment is reasonably accurate.
At portfolio review
If you occupy multiple properties, assessing them together gives you a complete picture of your lease-end exposure across the portfolio. You could also manage your tax liability by reviewing different properties within the portfolio at different times.
Before committing to renewal
If you’re deciding between renewal and relocation, you need to know your exit costs. A renewal decision that ignores dilapidations isn’t a fully informed decision.
When considering a break clause
Break clauses often require compliance with lease conditions, including repair obligations. Understanding your position before deciding whether to break is essential.
What we do
- 01
Lease review
We analyse your lease to understand your obligations:
- Repair requirements — what standard must the property meet?
- Decoration requirements — internal, external, frequency
- Reinstatement obligations — must alterations be removed?
- Yield-up provisions — what condition at lease end?
- Schedule of Condition — does one exist, and what does it limit?
We also review licences for alterations and any other relevant documents.
- 02
Inspection
We inspect the property against your lease obligations:
- What repairs are needed or will be needed?
- What decoration will be required?
- What alterations need reinstating?
- What compliance issues exist?
We assess current condition and consider likely deterioration between now and lease end.
- 03
Assessment
We estimate costs for items likely to appear in a terminal schedule:
- Repair items with budget costs
- Decoration with budget costs
- Reinstatement with budget costs
- Other items (cleaning, compliance matters) as applicable
We apply appropriate assumptions about condition at lease end, not just current condition.
- 04
Report
We provide a written report including:
- Summary of lease obligations
- Assessment of likely items
- Budget costs for each category
- Confirmation whether Section 18 of the Landlord and Tenant Act can be used as an appropriate defence
- Total estimated liability
- Recommendations for managing exposure
What you get
- Written assessment — Professional report suitable for internal planning and financial provisioning
- Budget liability figure — The number you need for planning purposes
- Item breakdown — Understanding of what’s driving the figure
- Recommendations — Advice on managing liability proactively
- Audit-ready documentation — Evidence for financial reporting purposes
How accurate is it?
An assessment is an estimate, not a guarantee. Actual claims will depend on:
- Property condition at lease end (which can change)
- Your landlord’s approach (some claim more aggressively than others)
- Negotiations (claims typically settle below initial figures)
- Market conditions (building costs fluctuate)
We aim for realistic estimates that give you a useful planning figure. In our experience, well-prepared assessments typically land within a reasonable range of eventual settlements — they’re not precise predictions, but they prevent major surprises.
Using the assessment strategically
Provisioning
The assessment figure goes into your financial provisions. Review it annually and update if circumstances change significantly.
Works decisions
Some items are cheaper to address proactively than to include in a lease-end settlement. Internal decorations, for example, might cost less if done during quiet periods with your chosen contractors than as emergency works priced by the landlord. We can advise on what’s worth doing early, but it is worth noting that most leases include for decorations to be undertaken within the last 6 or 12 months of the term.
Lease negotiations
If you’re negotiating renewal, understanding your exit costs strengthens your position. You can factor dilapidations into the overall commercial picture.
Break clause decisions
Knowing what you’d owe helps you decide whether exercising a break makes sense financially.
Confidentiality
Your Dilapidations Assessment is privileged advice to you. It’s not shared with your landlord. Your landlord won’t know what estimate you’ve received or what you’ve provisioned. This is your private planning tool.
Related services
When the claim arrives:
- Dilapidations for Tenants — Expert defence and negotiation when your landlord serves a schedule
If your landlord acts mid-lease:
- Interim Schedules for Tenants — Responding to schedules served during the lease term
If you decide to do works:
- Contract Administration — Managing proactive works or lease-end remediation
If defects need investigation:
- Building Pathology & Defect Analysis — Understanding complex defects that may affect your liability
At lease start:
- Schedules of Condition for Tenants — The baseline protection that limits your liability
FAQs
How accurate is the assessment?
It’s a realistic estimate based on current information and reasonable assumptions. Actual claims will vary depending on property condition at lease end, your landlord’s approach, and negotiation outcomes. The assessment prevents surprises rather than predicting exact figures.
Can my landlord see the assessment?
No. It’s privileged advice to you and isn’t shared with your landlord.
Should I do the works myself based on the assessment?
Possibly, for some items. We can advise which works are worth doing proactively and which are better left to negotiation.
How often should I update it?
Review annually if circumstances change significantly. Otherwise, the assessment remains valid for planning purposes until you’re close to lease end.
What if the assessment is higher than I expected?
Better to know now than when the claim arrives. An unexpectedly high figure gives you time to plan: budgeting, exploring options to reduce liability, or factoring it into property strategy decisions.