Dilapidations
The landlord of a commercial property aims to secure the legal responsibility of their tenant, who covers the expenses incurred for any property damages at their fault.
What is a dilapidations survey?
Dilapidations are the repairs, redecorations and reinstatement works a commercial tenant is obliged to deal with under the lease — most sharply at lease end. A landlord will want to make the tenant responsible for rectifying any damage they cause; a dilapidations survey assesses the property against the lease's repairing, decorating and yielding-up covenants, and turns the difference into a schedule that can be negotiated, priced and settled.
How the dilapidations process runs at lease end
The sequence is well established. The landlord's surveyor prepares a schedule of dilapidations — usually a terminal schedule served near or at lease expiry — itemising the alleged breaches of covenant and the works needed to remedy them, typically followed by a Quantified Demand setting out the monetary claim. The tenant's surveyor responds item by item, testing what the lease actually requires, what condition the property was in at the start, and what the landlord genuinely intends to do with the building. Negotiation then narrows the schedule to a settlement figure. The Dilapidations Protocol — the pre-action protocol the courts expect parties to follow — keeps both sides' claims realistic and endorsed by their surveyors, and Section 18(1) of the Landlord and Tenant Act 1927 caps damages at the reduction in the value of the landlord's interest, which is frequently less than the cost of the works claimed.
Dilapidations for landlords
Instructing a surveyor early protects the asset: interim schedules during the term stop disrepair compounding, and a properly evidenced terminal schedule — served at the right time and priced credibly — settles faster and closer to its full value than an inflated one. The panel's surveyors prepare and serve schedules, negotiate with the tenant's surveyor and advise on strategy where reletting or redevelopment plans affect what can genuinely be claimed.
Dilapidations for tenants
Tenants also have the right to hire their own surveyor to assess dilapidations and determine if the landlord's request for repairs is fair and reasonable. In practice a tenant's surveyor routinely reduces claims substantially — challenging items the lease never covered, works the landlord will never do, and figures the Section 18 cap cuts down. The stronger move is earlier still: taking dilapidations advice before the lease expires lets you carry out the works yourself at contractor cost rather than paying the landlord's figure for them.
Protection before the lease starts: schedule of condition
Before signing the lease agreement, you want to hire a surveyor to produce a Schedule of Condition. This document will provide a record of the condition of the property — and when appended to the lease it caps your repairing obligation at that documented condition, which can transform the dilapidations position years later.
Fees and timescales
Fees are quoted fixed once the property, the lease and the stage of the matter are described; straightforward schedules and responses are turned around quickly enough to meet lease-end and Protocol timetables. For wider due diligence on commercial premises, see commercial building surveys and the panel's other building surveying services.
Disputed dilapidations claims
Where a claim is disputed, the panel also provides dilapidations expert witness services, including Section 18 diminution valuations — CPR Part 35-compliant evidence for court where negotiation fails.
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Frequently asked questions
How is a dilapidations survey conducted?
Dilapidation surveys are usually initiated by landlords. They can also be beneficial for tenants in some situations.
During a dilapidations inspection a surveyor carefully examines the condition of the property room by room thoroughly assessing elements such as ceilings, walls, windows, doors, floors, electrical systems, radiators and more. Essentially every visible area of the property is inspected. The surveyor may also evaluate the condition of neighbouring properties to establish a comparison.
If there is a need to seek compensation from the tenant it is essential for a surveyor to prepare a Schedule of Dilapidations. This document details the damages. It also provides an estimate for repairs or renewals.
Please follow the Dilapidations Protocol.
What benefits do tenants gain from a dilapidations survey?
- Reduce expenses: considering that landlords can request reimbursement, for both losses and repair costs, it might be an idea to hire a surveyor to perform a dilapidations survey before your tenancy ends.
- Maintain control: addressing damages and reinstatement via the Schedule of Dilapidations gives you the flexibility to choose your own cheaper contractors instead of the more expensive contractors chosen by your landlord.
- Minimise conflicts: challenging a claim is time consuming and stressful. So, it would be wise to enlist the services of a surveyor for a dilapidations survey, which will help you fast-track resolution. Speaking of which, most disputes are resolved outside of court through Alternative Dispute Resolution (ADR). Our team of surveyors is available to guide you through this process of facilitating agreements through determination, arbitration or mediation.
What are the costs?
Compensation requests should be based on the expenses of repairing any damage or measurable financial losses, such as fees for surveyors and third parties, and any loss of income or service charges incurred due to repairs damage to the property’s condition, etc.
Can landlords profit from tenants through dilapidations?
Landlords are not allowed to make money from their tenants through dilapidations. The property can only be restored to its original state; any improvements, beyond that are not included in this context. Alteration is not considered within these terms.
What benefits do landlords gain from a dilapidations survey?
- Ensure that your tenant fulfils their obligations: there is often a possibility that tenants may cause damage or make alterations to your property. In such cases you want to make sure that they are legally obligated to carry out the repairs or restorations so that you don't face unexpected expenses.
- Mitigate the risk of setbacks: including your tenant’s maintenance responsibilities in the lease agreement is vital. Failure to do so might limit your ability to seek compensation for damages when their tenancy ends.
- Document your property’s condition before leasing: do this before a tenant moves in. You will be armed with evidence of the original condition if disputes arise.