Top 10 Dilapidations Facts

June 23, 2023

1. Schedule of Dilapidations – What is it?

A schedule of dilapidations records the works required to be done to a property in order that it is put into the physical state the property should have been put in if the tenant had complied with its covenants or obligations contained within the lease of the property.

Landlords – need to be sure that they get the best advice and practice to avoid drawn-out expensive settlements.

Tenants – need proper planning and budgeting to ensure there are no unwelcome surprises at lease end. Both sides benefit from a considered approach which ideally starts before the lease is signed.

2. What does Dilapidations mean?

The term dilapidations refers to a state of disrepair in a property where there is a legal liability for the condition of disrepair. This legal liability usual arises from express covenants contained within a lease, but may be a consequence of the law of tort or implied contract.

Landlords and Tenants frequently enter into a lease without specific regard for condition at the commencement of the tenancy and no particular strategy to maintain the building in accordance with the repairing covenants during the period of occupation.

The landlord and tenant may renew the original tenancy without necessarily considering the condition of the property or the implication of any improvements or alterations, which might have been undertaken.

When the landlord/tenant relationship eventually ends, attention will focus on the condition of the building and the dilapidations issues.

Unless the parties to the lease have had the foresight to consider a dilapidations procedure well before the end of the tenancy, this is very often the starting point for a dilapidations dispute.

3. What is a “Yield Up” clause and does it affect dilapidations liability?

Dilapidations generally concern the Tenant’s failure to observe certain obligations within the lease, thereby breaching one or more covenants. In general terms, these breaches fall in to four main categories: Repair, Decoration, Reinstatement and Statutory Compliance.

The ‘Yield Up’ clause is key to reiterating the requirements on the Tenant elsewhere in the lease, as well as outlining further conditions to make sure the premises are handed back to the Landlord with vacant possession, and in a repaired, decorated, reinstated and cleansed state compliant with current regulations.

4. Does a landlord have to serve a schedule of dilapidations at the end of a tenancy?

There are two types of schedule of dilapidations, which are served at different times during and after the tenancy.

  1. An interim schedule is served during the term of the tenancy, in contemplation of remedy of any alleged breaches during the contractual term of the lease and not in anticipation of the lease end.
  2. A terminal schedule of dilapidations is prepared at or shortly after the end of the lease term. The tenant will not be entitled to undertake remedial works themselves once their right of occupation has come to an end.

5. Does the landlord need to follow a Procedure to serve of Schedule of Dilapidations?

The short answer is yes. The schedule must specify:-

  1. The terms that have been allegedly breached.
  2. The Landlord’s opinion of what is required to return the building to a satisfactory condition.
  3. A cost schedule for the necessary remedial works.

6. Is there a body which governs dilapidations procedure?

The Royal Institution of Chartered Surveyors has issued its own Guidance Note on Dilapidations giving practical advice to surveyors which explains how to prepare, serve and respond to dilapidations claims, both before and after the commencement of proceedings.

7. Why are Dilapidations so Complicated and Costly?

Dilapidations is unique to the UK and is enforceable in a court of law. Clearly, a landlord will interpret disrepair in an entirely different way to a tenant and the legal interpretation of lease clauses can vary on a case-by-case basis.

8. Should the same approach be taken with all dilapidations claims?

The property market dictates the approach to a dilapidations claim depending on whether demand for that kind of space is weak or not.

In weak market conditions:

During a market downturn an oversupply of space or a lack of demand results in tenants being able to negotiate higher incentives, lower rents and more flexible lease terms when taking a new lease. A shrewd tenant will also negotiate their end of term options early.

Landlords will look at the dilapidations issues early and take measures to avoid lengthy vacant periods.

In a strong market:

During a buoyant market, supply is often limited which means landlords are in a good position to negotiate strong terms. Tenants should look beyond the rent and initial incentives when negotiating a lease and should look at their liabilities over the duration of their tenancy.

9. What is Section 18(1) and how does if affect dilapidations?

A Section 18 (1) Valuation provides a statutory cap for damages, by calculating the difference by which the value of the landlord’s interest has been reduced on account of the breaches of lease covenant. This is otherwise known as the ‘diminution in value’ of the landlord’s interest.

The cap can have a significant impact on a landlords dilapidations claim. For example in Hammersmatch V Gobian the landlords claim was reduced from £6.8m to less than £1m. Where a building is in disrepair at the end of the term, Section 18 (1) of the Landlord and Tenant Act, 1927, limits the landlord’s claim for damages for breach of a repairing covenant. There are two parts to section 18 (1):-

The first limits the claim to the amount that the value of the landlord’s reversion is diminished by breaches of the covenant to repair. The landlord cannot recover more than it has cost, in terms of the loss caused to the value of the property. This is the diminution in the property’s reversionary value, caused by the disrepair.

The second part states that no damages are recoverable, if it can be shown that on expiration of the lease the premises would be demolished or altered to the extent that would render valueless the repairs in question.

10. What is the Dilapidations Protocol?

The Dilapidations Protocol was formally adopted by the Court Rules on 1st January 2012, and is now Law in England & Wales.

The aim of the Protocol is to ensure that a claim is reasonable and understandable, facilitating settlement before court proceedings are issued. Where litigation cannot be avoided, then the Protocol facilitates the efficient management of the process.

The Pre-action Protocol is produced by the Property Litigation Association (PLA) in consultation with the Royal Institution of Chartered Surveyors (RICS). It is quite clear and unavoidable, and should be used in all claims for damages for breaches of tenant’s repairing obligations, at the expiry of the lease term.

The courts now treat the Protocol as the normal and reasonable approach to pre-action conduct, and non-compliance might bring sanctions against the party concerned. It is therefore essential that surveyors, landlords and tenants understand fully the implications of this document.

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Robert Huitson

Durham Office Manager

Robert Huitson services all the dilapidations requirements of corporate occupiers and landlords within the North East area. He has experience in all core building surveying areas, but specialises in dilapidations and project management.

Alan Grant

Edinburgh Office Manager

Alan Grant is a chartered building surveyor with over 30 years of experience in all aspects of Building Surveying. He has worked both in Scotland and England providing a full range of Building Surveying services to public sector bodies, corporates and private sector property owners.

Neil Orton

Birmingham Office Manager

Neil Orton offers landlords, tenants and their consultants an exceptional standard of Dilapidations surveying. He will personally handle your enquiry and has an objective to achieve the best possible outcome for his clients.

Anthony Pugh

Swindon Office Manager

Anthony Pugh has over 30 years of experience in the property industry specialising in Dilapidations and was a member of the Steering Group of the RICS Dilapidations Forum between April 2007 and July 2010.

Anthony’s wealth of experience brings a commercially aware and practical approach to his work.

Anthony Cross

London and East of England Office Manager

Anthony Cross operates in London and East Anglia. He specialises in Dilapidations and takes pride in providing a thorough and equitable service to Landlords and Tenants. Anthony also provides comprehensive Photographic Schedules of Condition as well as Video Schedules.

Laurence Davis


Laurence has a proven track record of creating dynamic successful businesses in a wide variety of industries over a sustained period of time. He has an impressive portfolio of properties and therefore has first hand experience of the Dilapidations market and its challenges.

Paul Lande


Paul’s expert analytical and visionary problem solving skills coupled with attention to detail has established Dilaps UK as the market leader in all aspects of Dilapidations, since he founded the business in 2009.

Anthony Lorenz

Strategic Marketing Director

Anthony is one of the best-known agents in the UK property industry with over 55 years’ experience in commercial property specialising in professional work including dilapidations. With a host of landlord and tenant clients and a wealth of knowledge in service marketing, Anthony heads up National Marketing for Dilaps UK.

Anthony enjoys spending time in his Mayfair home entertaining clients and friends in the evenings. On weekends, he retreats to his 13th-century country home, where he enjoys an equestrian lifestyle and plays competitive polo throughout the summer.