Last reviewed 9 September 2026
Dilapidations is the term used for a landlord's claim that a tenant has not complied with the repair, decoration, reinstatement and yielding up obligations in a commercial lease in England and Wales.
It usually surfaces near the end of the term, at a break date, or shortly after the tenant leaves, and it often arrives as a large schedule with a surveyor's costings attached. Businesses are frequently surprised because nothing was raised during the term.
This guide explains the process in general terms so you know what to expect. It is general information rather than advice on your lease, and the wording of your own lease will drive the answer.
What the claim is actually based on
Everything starts with the lease. The repairing covenant, the decorating covenant, any schedule of condition attached at the start, the alterations and reinstatement provisions, and the yielding up clause together define what the tenant must hand back and in what state.
A full repairing and insuring lease puts a wide obligation on the tenant. A lease limited by a schedule of condition, with photographs taken at the start, limits the tenant's obligation to the recorded state, which is why that document is worth so much at the end.
The schedule of dilapidations
An interim schedule may be served during the term where there is time to remedy items. A terminal schedule is served at or near the end and lists each alleged breach, the work said to be needed and the cost claimed.
There is a professional protocol for these claims which encourages the parties to exchange a properly particularised schedule and a response, and to try to settle before proceedings. In practice the parties instruct building surveyors who negotiate the schedule item by item.
Why the final figure is usually lower
Common reductions include items that are betterment rather than repair, items already covered by a schedule of condition, works the landlord would have carried out anyway as part of a redevelopment or refit, double counting between repair and reinstatement, and inflated rates for the work.
The landlord's recovery is also linked to the loss actually suffered as a result of the disrepair rather than simply the cost of the works listed, and there is a statutory limit on damages for breach of a repairing covenant tied to the effect on the value of the landlord's reversion. Where a landlord strips out the space immediately, that has an obvious bearing on the claim.
Alterations and reinstatement
Fit out works carried out under a licence for alterations usually come with an obligation to reinstate at the end, sometimes only if the landlord asks within a set period. That notice requirement is often missed by landlords and is worth checking.
Where reinstatement is required, get quotes early. Removing partitions, cabling, kitchens and branding costs more and takes longer than most occupiers expect, and doing it yourself before you leave is normally cheaper than paying the landlord's contractor rates afterwards.
Break clauses raise the stakes
Where a lease is being ended by a tenant break, any condition attached to the break, such as giving vacant possession or complying with covenants, must be satisfied precisely. A failed break leaves the tenant liable for the remainder of the term, which dwarfs any dilapidations argument.
If you are relying on a conditional break, take advice on the notice and the conditions well before the notice deadline rather than after serving it.
How tenants prepare
Twelve to eighteen months before the end, read the lease and any licences, find the schedule of condition and photographs from the start of the term, and get an independent building surveyor to walk the property and give you a realistic view.
Decide whether to carry out the works yourself, negotiate a cash settlement or agree a surrender package with the landlord. Budget for the outcome in advance so the claim does not land as an unplanned cost in the year you are also moving premises.
Key points
- The lease wording, not the schedule, defines the obligation.
- A schedule of condition from the start of the term is often the strongest defence.
- Served schedules are opening positions and are commonly negotiated down.
- Reinstatement obligations sit in licences for alterations, not just the lease.
- Conditional break clauses must be complied with exactly.
- Start the review twelve to eighteen months before lease end.
Frequently asked questions
- What is a schedule of dilapidations?
- A document served by a landlord listing alleged breaches of the repair, decoration and reinstatement obligations in the lease, usually with costings prepared by a surveyor. It can be served during the term or at the end.
- Do I have to pay the amount claimed?
- Not automatically. The schedule is the landlord's position. Claims are routinely negotiated between building surveyors, and the landlord's recovery is tied to the loss suffered rather than simply the list of works.
- Does it matter if the landlord is redeveloping?
- Yes, it can matter a great deal. Where the landlord intends to carry out works that would make the disputed repairs pointless, that affects what can properly be recovered. Evidence of the landlord's intentions is worth gathering.
- Who pays for the surveyors?
- Each party normally instructs and pays for its own building surveyor, and those costs can form part of the negotiation. A tenant side survey usually pays for itself where the claim is significant.
- Can I avoid a claim by doing the works myself?
- Often you can reduce it substantially. Carrying out repairs and reinstatement before you hand back, to the standard the lease requires, is usually cheaper than paying damages based on the landlord's contractor pricing.