Dilapidations Claims UK: Landlord & Tenant Guide
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When a commercial lease comes to an end, disputes about the state of the property are one of the most frequent flashpoints between landlords and tenants. A dilapidations claim is the mechanism by which a landlord seeks redress for breaches of the tenant's repair, decoration, and reinstatement covenants, and the sums at stake can run into tens or hundreds of thousands of pounds.
Whether you are a landlord preparing a schedule or a tenant who has just received one, how you respond in the first few weeks often shapes the final outcome. This guide explains how dilapidations claims work in England and Wales, the protections available to tenants, the process surveyors and solicitors typically follow, and the practical steps that tend to produce a fair settlement without ending up in court.
Overview
A dilapidations claim is a demand by a landlord for damages or remedial works arising from a tenant's failure to meet their obligations under a commercial lease. Those obligations usually cover repair, redecoration, reinstatement of alterations, and compliance with statute.
Claims are generally brought at lease expiry (known as terminal dilapidations) but can also be raised mid-term (interim dilapidations) where disrepair threatens the landlord's reversionary interest. The starting point is always the lease itself: the scope of the tenant's liability depends on the precise wording of the repairing covenant, any schedule of condition attached at the outset, and any licences for alterations granted during the term.
In England and Wales, claims are also shaped by the Dilapidations Protocol under the Civil Procedure Rules and by section 18(1) of the Landlord and Tenant Act 1927, which caps damages at the diminution in the value of the landlord's reversion. Understanding where your situation sits within that framework is essential before any figures are agreed.
Key steps
- Read the lease and any schedule of condition. Before responding to a claim, work through the repairing, decorating, yielding up, and reinstatement clauses line by line. Check whether a photographic schedule of condition was annexed at the start of the term, because this limits the tenant's obligation to returning the property in no worse condition than recorded.
- Review the schedule of dilapidations. The landlord's surveyor will serve a schedule listing alleged breaches, the remedial works required, and the estimated costs. Each item needs to be checked against the lease wording, the property's actual condition, and the principle that tenants are not liable for fair wear and tear unless the lease says otherwise.
- Consider the Section 18 cap. Under section 18(1) of the Landlord and Tenant Act 1927, damages cannot exceed the reduction in the value of the landlord's reversion caused by the disrepair. If the landlord intends to demolish or substantially alter the building, the claim may be reduced to zero regardless of the repair costs listed.
- 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 expected conduct before proceedings. It requires the landlord to serve a Quantified Demand and the tenant to respond within a reasonable period, usually 56 days, setting out which items are accepted or disputed.
- Negotiate or mediate a settlement. Most dilapidations claims settle without litigation. Surveyors for each side will typically meet, walk the property, and agree a Scott Schedule narrowing the disputed items. Mediation is a common next step if direct negotiation stalls, and it is usually far cheaper than issuing a claim in the County Court or High Court.
Common questions
If you're dealing with this kind of situation, a call with an experienced legal adviser can help you work out the right next step — from £149.
Common questions
Q What is the difference between terminal and interim dilapidations?
Terminal dilapidations are claimed at or shortly after lease expiry and cover the full range of repair, decoration, and reinstatement breaches. Interim dilapidations arise during the term, usually where disrepair is bad enough to damage the landlord's reversion. Interim claims are less common and are often subject to the Leasehold Property (Repairs) Act 1938, which restricts the landlord's remedies on longer leases.
Q What is a schedule of condition and why does it matter?
A schedule of condition is a photographic and written record of the property's state at the start of a lease, usually annexed to the lease itself. If properly incorporated, it caps the tenant's repairing obligation so they are not required to hand the building back in a better state than it was in at the outset. For older buildings, a schedule of condition can dramatically reduce exposure to a terminal claim.
Q Does the Section 18 cap always apply?
Section 18(1) of the Landlord and Tenant Act 1927 applies to claims for damages for breach of a repairing covenant at the end of the term. It limits recovery to the actual loss in the value of the landlord's reversion. If the landlord carries out the works and relets, the cost of works is often a reasonable proxy. If the landlord demolishes or redevelops, damages may be significantly reduced or eliminated.
Q Who pays the surveyor's and legal fees in a dilapidations claim?
Most commercial leases allow the landlord to recover the reasonable costs of preparing and serving a schedule from the tenant, though the wording varies. In litigation, costs generally follow the event, meaning the losing party pays a proportion of the winner's costs. Because fees can escalate quickly, early engagement and willingness to negotiate tend to produce far better outcomes than a drawn-out dispute.
Q Can a tenant just do the works themselves before lease end?
Often yes, and it can be the cheapest option. If the tenant completes the remedial works to the required standard before handing back the property, there is nothing for the landlord to claim damages for. Timing is important though: works need to be finished by the lease end date, carried out to a proper specification, and ideally evidenced with photographs and contractor records in case the position is later challenged.
Q How long does the landlord have to bring a dilapidations claim?
A claim for breach of a repairing covenant is generally subject to a six-year limitation period under the Limitation Act 1980, or twelve years if the lease was executed as a deed, which most commercial leases are. Time usually runs from the date of the breach. In practice, landlords are expected to serve a schedule and Quantified Demand promptly after lease end under the Dilapidations Protocol.
Q What happens if we cannot agree on the figures?
If negotiation and surveyor-led discussions do not produce a settlement, the landlord can issue court proceedings for damages. Before that point, both sides are expected to have followed the Dilapidations Protocol, exchanged a Scott Schedule, and considered alternative dispute resolution. Mediation and expert determination are both used regularly in larger claims and can resolve matters in days rather than the months a trial would take.
If you're dealing with this kind of situation, a call with an experienced legal adviser can help you work out the right next step — from £149.
Sources
This guide is based on primary UK law and official guidance.
- Guidance · HMCTSPre-Action Protocol for Claims in Relation to the Physical State of Commercial Property (Dilapidations Protocol)justice.gov.uk
- LegislationLandlord and Tenant Act 1927, section 18legislation.gov.uk
- LegislationLeasehold Property (Repairs) Act 1938legislation.gov.uk
- LegislationLimitation Act 1980legislation.gov.uk
Legal helpline
Facing a dilapidations schedule and unsure what to do?
Dilapidations claims often look far larger on paper than they turn out to be once the lease wording, the Section 18 cap, and the landlord's actual plans for the building are properly considered. An experienced legal adviser can help you think through where you stand and what to prioritise based on what you describe on the call.
- A plain-English explanation of how dilapidations claims work in your circumstances
- Practical perspective on the schedule you have received or are preparing
- What to watch out for when negotiating with the other side's surveyor
- Clarity on your next steps based on what you describe
Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.