What is dilapidations: dilapidations explained
Dilapidations are the breaches of a commercial tenant's lease obligations to repair, decorate, and reinstate a property, together with the money claim a landlord brings to put those breaches right. In England and Wales the remedy at the end of a lease is damages, not an order compelling the tenant to do the work.
The word gets used loosely for the bill. Surveyors use it more precisely: the breaches are the dilapidations, a schedule lists them, and the claim quantifies what they cost.
What does dilapidations mean in practice?
Three obligation types usually sit inside one claim, and they do not behave the same way.
- Repair. Keeping the fabric and the services in the condition the lease requires. This is the part a statutory cap applies to.
- Decoration. Redecorating at set intervals or in the final year of the term, often to a standard the lease specifies.
- Reinstatement. Stripping out tenant alterations and putting the property back, where the licence for alterations or a reinstatement notice requires it.
Section 18(1) of the Landlord and Tenant Act 1927 bites on repair. It does not apply to decoration, removal, and reinstatement, which are assessed under different rules on damages. The RICS professional standard Dilapidations, England and Wales, 7th edition, published September 2016 and reissued as a professional standard in December 2023, says so directly at paragraph 8.1.6.
Interim and terminal claims: when does each apply?
- Interim schedule of dilapidations. Served during the term, aimed at getting breaches remedied while the tenant is still in occupation. The Leasehold Property (Repairs) Act 1938 restricts what a landlord can do with these on longer leases.
- Terminal schedule. Prepared at or shortly before the end of the term, and covering yield-up obligations. This is what most people mean by a dilapidations claim.
- Break clause disrepair. The sharpest version. Where a break is conditional on vacant possession or compliance with covenants, a modest amount of disrepair can invalidate the break and leave the tenant holding the lease for years.
How is a dilapidations claim calculated?
Terminal claims in England and Wales run through the Pre-Action Protocol for Claims for Damages in Relation to the Physical State of Commercial Property at Termination of a Tenancy, known as the Dilapidations Protocol.
- Quantified demand. The landlord sends the schedule and the quantified loss, generally within 56 days of termination.
- Surveyor endorsement. The surveyor confirms that the works listed are reasonably required, that full account has been taken of the landlord's intentions for the property, and that the costings are reasonable.
- Response. The tenant replies, usually within 56 days, normally in Scott Schedule format so each item can be argued line by line.
- Quantification of loss. Before proceedings the landlord must show either actual expenditure or a formal diminution valuation.
Two things then pull the number down. Section 18(1) limb one caps damages for disrepair at the amount by which the value of the landlord's reversion is reduced by the breach. Limb two removes damages altogether where the premises were going to be demolished, or structurally altered in a way that would make the repairs worthless. Supersession works alongside that: if the landlord was going to strip out and refit the floor anyway, the tenant should not pay for tiles that were heading into a skip.
Why the schedule of condition decides so much of it
A repairing covenant is measured against a standard, and a schedule of condition is what fixes that standard at the date the lease began. Without one, the argument becomes a contest of recollection about whether a crack, a stain, or a failing roof light was there on day one. With one, the tenant's liability is limited to leaving the property in no worse condition than the record shows.
The RICS standard lists schedules of condition, together with appropriate photographs, among the documents a surveyor should obtain before preparing a claim. That instruction is worth reading in reverse: photographs with no schedule, or a schedule with weak photographs, is the position most disputes actually start from.
A worked example
A tenant leaves a 1980s office of 900 square metres after a 10 year full repairing and insuring lease. The landlord's terminal schedule runs to 140 items and a quantified demand of 310,000 pounds, made up of roof repairs, mechanical plant, carpets, redecoration, and removal of partitions the tenant installed under licence.
The tenant's surveyor responds with a schedule of condition annexed to the lease showing the roof coverings already at the end of their life in year one, and a marketing brochure showing the landlord offering the floor as a shell for refurbishment. Roof and carpets fall away on supersession, plant reduces on evidence of servicing, and reinstatement of the partitions survives because it sits outside section 18(1). The claim settles at 74,000 pounds. Nothing about the building changed. The evidence about its starting condition did.
How other markets handle end-of-lease reinstatement
Everything above is England and Wales. The Dilapidations Protocol forms part of the Civil Procedure Rules, which do not extend to Scotland, and section 18(1) of a 1927 Act of the Westminster Parliament has no Scottish equivalent, so Scottish dilapidations claims are argued under Scots law of leases on a different footing.
Outside the UK the same commercial question, who pays to put the building back, is usually answered by the lease wording rather than by statute: restoration or surrender clauses, a security deposit or bank guarantee drawn down at handover, or a joint handover inspection with an agreed defects list. A cap tied to the reduction in the landlord's investment value is unusual internationally. If you are advising across borders, read the lease and the local law rather than assuming the English structure travels.
For the survey work that feeds these claims, see building survey. Where the disrepair involves moisture, both sides need a cause established before the cost argument makes sense: see damp survey and water damage.