Dilapidations are one of the most contentious areas of commercial property law in England and Wales. Whether you are a landlord seeking to recover repair costs at lease end, or a tenant facing a hefty schedule of dilapidations claim, understanding the process — and acting early — can make a very significant financial difference.

Having handled dilapidations matters across London's commercial property sector for many years, I've seen tenants lose tens of thousands of pounds they simply didn't need to pay — and landlords under-recover because they didn't act promptly or correctly. This guide cuts through the complexity.

What Are Dilapidations?

Dilapidations refer to the disrepair or breaches of lease covenant that exist in a property at the end of a commercial tenancy. Under most commercial leases, tenants are required to keep the property in good repair and condition, and to return it at lease end in the same state (or better) than when they took it on.

When a tenant fails to comply, the landlord may serve a Schedule of Dilapidations — a formal document setting out all alleged breaches and the estimated costs to remedy them.

Types of Dilapidations Schedules

There are three main types your surveyor will refer to:

  • Interim Schedule: Served during the lease term to notify the tenant of ongoing breaches and prompt remedial works before lease end.
  • Terminal Schedule: The most common type — served at or near lease end, setting out all outstanding disrepair, decorative deficiencies, and failure to remove alterations.
  • Quantified Demand: Served alongside or after the terminal schedule, itemising the landlord's financial claim with contractor estimates or agreed costings.

The RICS Dilapidations Protocol

The RICS Professional Statement on Dilapidations (2016) governs how surveyors prepare and respond to claims in England and Wales. Key requirements:

  • Schedules must be prepared by a surveyor with appropriate experience
  • Each item must identify the breach, the relevant covenant, and required remedial works
  • Costs must be reasonable and based on competitive contractor prices
  • Tenants have the right to respond with a Scott Schedule
  • Parties should attempt to negotiate before resorting to litigation

The Section 18(1) Diminution Cap — A Tenant's Key Defence

Under Section 18(1) of the Landlord and Tenant Act 1927, a landlord's damages claim is capped at the diminution in the value of the landlord's reversionary interest caused by the dilapidations. In plain terms: if the building is going to be demolished or substantially altered anyway, the landlord cannot recover full repair costs.

This "Section 18 defence" is one of the most powerful tools available to tenants — and one that is frequently overlooked by those without specialist advice.

What Does a Dilapidations Surveyor Do?

A specialist dilapidations surveyor acting for either party will:

  • Inspect the property in detail and assess condition against the lease covenants
  • Prepare or critically review the Schedule of Dilapidations
  • Obtain or robustly challenge contractor costings
  • Advise on the Section 18 diminution cap
  • Negotiate a financial settlement on your behalf
  • Prepare a Scott Schedule if the matter proceeds to formal dispute
Case Study: A retail tenant in Victoria, London received a terminal schedule claiming £180,000. Our dilapidations surveyor reviewed the schedule line by line, challenged inflated costings, and established that the landlord planned to redevelop the unit — making Section 18 applicable. We settled at £42,000. The tenant's surveyor fee was less than £3,000.

Tips for Tenants Facing a Dilapidations Claim

  • Act immediately — instruct a surveyor as soon as you receive any dilapidations notice
  • Review your lease carefully — check exactly what your repairing covenants require
  • Consider carrying out repairs yourself — nearly always cheaper than paying the landlord's claim
  • Investigate Section 18 — especially if the building is ageing or the landlord plans to redevelop
  • Commission a Schedule of Condition at lease start — the single most effective way to limit future liability

Tips for Landlords

  • Inspect the property before lease end — give tenants the chance to remedy works in advance
  • Serve the schedule promptly — delays weaken your claim and allow the tenant to argue they were not given the opportunity to remedy
  • Ensure costs are reasonable and supported — inflated claims are easily challenged and damage credibility
  • Keep comprehensive records — photographs, schedules of condition, and all correspondence strengthen your position

FAQ: Dilapidations

Yes. A landlord has up to six years from the end of the lease to bring a dilapidations claim (12 years for claims under a deed). However, acting promptly is always advisable as evidence and costings become harder to establish over time.

A Scott Schedule is a formal document used in dilapidations disputes to set out each party's position on every item of claimed disrepair, side by side. It allows a court or arbitrator to see clearly where the parties agree and disagree, and is commonly used when matters proceed beyond negotiation.

Negotiations typically take between three and twelve months from service of the terminal schedule to final settlement. The timeline depends on the complexity of the property, the number of items in dispute, and how quickly both parties engage with the process. Most cases settle without litigation.