Dilapidation Schedules UK: Commercial Lease Guide

What this document is

A dilapidation schedule, sometimes called a schedule of dilapidations, is a formal document that lists alleged breaches of a tenant's repair, redecoration, yielding up and reinstatement covenants under a commercial lease. It is usually drawn up by a chartered building surveyor acting for the landlord, and it typically includes a description of each defect, a reference to the relevant lease clause, the remedial work the landlord says is required, and a costed valuation of that work.

The purpose is twofold. First, it gives the tenant clear notice of what the landlord considers to be outstanding. Second, it forms the basis of any claim for damages or specific performance if the parties cannot reach agreement. A well-prepared schedule should be evidenced, proportionate, and capable of being tested against the actual wording of the lease.

Tenants are not obliged to accept the schedule at face value, and most claims are ultimately settled through negotiation rather than litigation.

How to use this document

1. Read your lease before doing anything else. The starting point is always the lease itself. Look carefully at the repairing covenant, the decoration clause, any schedule of condition attached, yielding up provisions, and clauses dealing with alterations and reinstatement. These determine the scope of what you are actually liable for, and they often narrow or expand the standard position in ways that significantly affect the value of any claim. 2. Instruct your own surveyor to review the schedule. Once a schedule is served, appoint an independent chartered building surveyor experienced in dilapidations work to inspect the property and respond item by item. Their job is to challenge items that go beyond the lease, question inflated costings, and identify work that is not reasonably required. A counter-schedule, often called a Scott Schedule, is the usual format. 3. Consider the statutory cap on damages. Section 18(1) of the Landlord and Tenant Act 1927 limits the landlord's damages for disrepair to the diminution in the value of the reversion caused by the breach. In practice this can cap a claim well below the cost of the works, particularly where the landlord intends to redevelop or re-let after significant refurbishment. A valuation surveyor should assess this. 4. Follow the Dilapidations Protocol. The Pre-Action Protocol for Claims for Damages in Relation to the Physical State of Commercial Property at Termination of a Tenancy sets out how parties should exchange information, respond to schedules, and quantify claims before issuing proceedings. Engaging with the protocol properly strengthens your position and helps avoid adverse cost consequences if the matter reaches court. 5. Negotiate towards a commercial settlement. The vast majority of dilapidations disputes settle without litigation. Once surveyors on both sides have exchanged positions, the parties typically negotiate a cash settlement that reflects the realistic cost of the works, the section 18 cap, and the landlord's genuine intentions for the property. Mediation or an independent expert determination can help where talks stall.