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Our experienced team specialises in both the enforcement and defence of dilapidations claims across commercial, industrial and retail properties. With in-depth knowledge of the Dilapidations Protocol, our surveyors provide expert advice on all aspects of the dilapidations process, from initial assessments through to negotiation and settlement.
A Schedule of Dilapidations is a formal report prepared by a surveyor on behalf of a landlord, identifying breaches of lease obligations by a tenant relating to repair, maintenance, redecoration or reinstatement. These reports may be served during the lease term, known as interim dilapidations, or at the end of the lease, referred to as terminal dilapidations. The process typically follows RICS guidance and complies with the Dilapidations Protocol.
To prepare the schedule, a surveyor will carry out a detailed inspection of the property to assess its current condition. The report will then outline any breaches of the lease covenants, describe the nature of the repairs or remedial works required, and, in the case of terminal dilapidations, include estimated costs for those works. Where a Schedule of Condition has been attached to the lease, it will be reviewed as part of the assessment to help determine which defects pre-dated the tenancy and which occurred during the lease term.
For landlords, a Schedule of Dilapidations provides a basis for recovering the cost of returning the property to the agreed standard. For tenants, the support of an experienced surveyor is invaluable in challenging dilapidations claims that may be excessive, unfounded or based on incorrect interpretation of the lease.
Tenants are often unaware of obligations such as redecorating at the end of the lease, undoing alterations, or reinstating the property to its original layout, even when the property was not in good repair at the outset. For this reason, it is essential to seek professional advice from a surveyor with a thorough understanding of dilapidations legislation and the technical ability to interpret the lease accurately.
At the end of a commercial lease, tenants are often contractually liable for the costs associated with dilapidations — including their landlord’s surveyor fees for preparing a Schedule of Dilapidations and the cost of any works required to return the property to the condition specified in the lease covenants. These claims can run into several thousands of pounds, making them a significant concern for tenants nearing lease expiry.
If a tenant believes that a dilapidations claim is inaccurate, excessive or unreasonable, they may instruct a surveyor to produce a Scott Schedule. This is an extended form of the Schedule of Dilapidations used to set out the tenant’s formal response to each item within the landlord’s claim. It provides a side-by-side comparison of the landlord’s assertions and the tenant’s rebuttal, supported by technical commentary and evidence.
Engaging a surveyor to review a claim and prepare a Scott Schedule can significantly reduce a tenant’s liability. In many cases, the surveyor’s findings allow the tenant to challenge unjustified claims and negotiate a more favourable settlement.
Dilapidations do not only arise at the end of a lease. Some leases include provision for interim dilapidations, where a landlord may serve a schedule during the lease term. These allow for early identification of issues and ensure that both parties are aware of their likely obligations in advance.
In addition, tenants can commission an anticipated schedule of dilapidations part-way through a lease term. In this scenario, our surveyors assess the property as though acting for the landlord, to identify potential liabilities and likely reinstatement items. This proactive approach enables tenants to plan for future costs, consider lease breaks or relocation, and manage budgets more effectively.
While tenants sometimes choose to carry out remedial works themselves, landlords frequently prefer a financial settlement. This often leads to negotiation between the parties, supported by their respective surveyors. A negotiated cash settlement is usually agreed, often at a reduced value, which removes the need for the tenant to complete the works themselves.
The most effective way to reduce exposure to dilapidations claims is to ensure that a Schedule of Condition is prepared and annexed to the lease at the outset. This provides an accurate record of the property’s condition when the lease begins and can be relied upon to challenge claims for pre-existing defects.
In addition, commissioning a Pre-Acquisition Survey before signing the lease is strongly advised where the tenant has full repairing responsibilities. This type of survey helps tenants understand the true condition of the property and the obligations they are about to take on. Our surveyors can also review the lease alongside the inspection, providing clear advice on the tenant’s likely repair and reinstatement duties.
Dilapidations play a vital role in protecting landlords’ interests by ensuring that tenants comply with their lease obligations and return the property in a suitable condition for re-letting or sale. It is common for landlords to pursue dilapidations claims at the end of a lease, particularly where the lease has run for a number of years and maintenance has been deferred. These claims can often be extensive if deterioration has occurred over time.
Landlords are encouraged not to wait until the end of a lease to consider dilapidations. By carrying out regular inspections during the term, landlords can identify emerging issues early. If significant repairs appear necessary, an interim Schedule of Dilapidations can be served. This gives the tenant an opportunity to address defects during the lease term, reducing the risk of protracted disputes later.
An interim dilapidations schedule not only ensures that the property remains in reasonable repair, but also provides protection should the tenant become insolvent before the end of the term. In such cases, at least a portion of the remedial works may have been addressed, reducing potential loss and delays in re-letting.
Terminal dilapidations are prepared towards the end of the lease term and aim to identify lease breaches and associated repair liabilities before the tenant vacates. This provides a window for negotiations or remedial works prior to handover. Final dilapidations, on the other hand, are compiled after the lease has ended and may include additional costs such as loss of rent if the property has remained unlettable due to its condition.
Both types of schedules contain detailed itemisations of lease breaches, required works, and costed estimates, and are typically supported by photographic evidence and reference to lease covenants.
Once a landlord receives a dilapidations report from a qualified surveyor, they may proceed to make a formal claim against the tenant, often via a solicitor. However, landlords must be aware of the statutory and legal limitations on such claims.
Under the diminution principle, a landlord cannot claim more than the actual reduction in the property’s value caused by its disrepair. Furthermore, if the landlord intends to redevelop or significantly alter the property in a way that renders the claimed repairs irrelevant, those costs may not be recoverable.
It is not uncommon for tenants to dispute dilapidations claims and appoint their own surveyors. This highlights the importance of instructing experienced, impartial professionals who can produce robust, well-evidenced reports that stand up to scrutiny.
At SJM Surveyors, our commercial surveyors are highly experienced in acting for both landlords and tenants. We prepare detailed, accurate dilapidations schedules and provide expert support during negotiations, helping to avoid unnecessary disputes and ensuring that claims are fair, proportionate, and compliant with the Dilapidations Protocol.
