Dilapidations Solicitors

What Are Dilapidations?

Dilapidations are breaches of a tenant's repairing, decorating and reinstatement obligations under a commercial lease. When a commercial lease ends — whether by expiry, forfeiture, surrender or break — the landlord is entitled to require the tenant to leave the premises in the condition required by the lease. If the tenant has not done so, the landlord can pursue a dilapidations claim for the cost of carrying out the necessary works.

Dilapidations claims are one of the most common and often most contentious areas of commercial property law. A well-presented dilapidations claim can run to hundreds of thousands of pounds for a large commercial building. Conversely, a tenant who receives an inflated terminal schedule of dilapidations can face devastating financial consequences if they do not take expert legal advice at the earliest opportunity.

How the Dilapidations Process Works

Acting for Landlords

Where a tenant has left premises in breach of their lease obligations, our solicitors work with specialist dilapidations surveyors to build a robust claim. We advise on:

• Reviewing the lease covenants to identify the scope of the tenant's repairing obligations
• Interim dilapidations notices served during the term — requiring the tenant to remedy identified breaches
• Terminal dilapidations schedules — prepared at or after lease expiry
• The section 18(1) cap — maximising the recoverable loss within the statutory limits
• Supersession — addressing the tenant's argument that the landlord intends to redevelop and would therefore not carry out the repairs in any event
• Pursuing dilapidations claims through the courts where negotiation fails
• Enforcement against former tenants and guarantors

Acting for Tenants

If you have received a dilapidations schedule — particularly a terminal schedule after vacating commercial premises — it is essential to take immediate legal advice. Many landlord dilapidations claims are significantly overstated. Our solicitors advise tenants on:

• Reviewing the dilapidations schedule against the precise wording of the lease covenants
• Identifying items that are not covered by the lease obligations — particularly where a schedule of condition limits the tenant's liability
• Applying the section 18(1) cap — where the landlord's actual loss is less than the cost of the claimed works (for example, because the landlord intends to redevelop)
• Supersession arguments — establishing that the landlord would not have carried out the works in any event
• Pre-expiry works — identifying which works should be carried out before lease end to reduce the claim
• Negotiating a commercial settlement of the dilapidations claim
• Defending dilapidations proceedings in the courts

The Section 18(1) Cap — A Critical Tenant Protection

Section 18(1) of the Landlord and Tenant Act 1927 limits the damages recoverable by a landlord in a dilapidations claim to the lesser of:

• The cost of the repairs, or
• The diminution in value of the landlord's interest in the property caused by the disrepair

This cap frequently applies where a landlord intends to redevelop or substantially alter the premises after the tenant vacates — in which case many of the alleged repairs would never have been carried out. Where the s.18(1) cap applies, a tenant's liability can be significantly reduced, or even extinguished altogether. Our solicitors always consider the s.18(1) cap as part of any dilapidations defence strategy.

Dilapidations Protocol

The RICS Professional Statement on Dilapidations and the Pre-Action Protocol for Property Claims provide a framework for the conduct of dilapidations disputes. Failure to follow the Protocol can result in cost penalties in subsequent litigation. Our solicitors ensure that all dilapidations disputes — whether acting for landlord or tenant — are conducted in accordance with the Protocol and that our clients' positions are properly protected.

Frequently Asked Questions