Understanding Dilapidations: A Landlord and Tenant Guide

Understanding dilapidations is crucial for both landlords and tenants in commercial property leases. At Twickenham Surveyors, we provide expert guidance on dilapidations obligations, schedules of dilapidations, and dispute resolution throughout West London including Richmond, Teddington, and Kingston.

Whether you're a landlord protecting your investment or a tenant facing a dilapidations claim, this comprehensive guide explains everything you need to know about commercial dilapidations in West London.

What Are Dilapidations?

Dilapidations refer to breaches of lease covenants relating to the repair, maintenance, decoration, and reinstatement of a commercial property. When a tenant fails to comply with their lease obligations, the landlord may pursue a claim for dilapidations to recover the cost of rectifying these breaches.

In simple terms, if you're a tenant and you've damaged the property or failed to maintain it according to your lease agreement, you may be liable for dilapidations. These obligations typically come into focus at the end of a lease term, though interim dilapidations can also arise during the tenancy.

Types of Dilapidations

1. Terminal Dilapidations

Terminal dilapidations are claims made at the end of the lease term. These are the most common type and cover all breaches of the repairing covenants accumulated throughout the tenancy.

• Timing: Typically served within a reasonable period after lease expiry
• Scope: Covers repairs, decoration, reinstatement, and removal of alterations
• Process: Usually follows the Pre-action Protocol for Dilapidations
• Common Issues: Worn carpets, damaged fixtures, poor decoration, structural repairs

2. Interim Dilapidations

Interim dilapidations arise during the lease term when the landlord notices breaches of the tenant's repairing obligations.

• Timing: Can be served at any point during the lease
• Purpose: To prevent deterioration and ensure ongoing compliance
• Enforcement: May lead to forfeiture proceedings if ignored
• Common Triggers: Structural damage, water ingress, health and safety issues

3. Inherent Defects vs. Disrepair

It's crucial to distinguish between inherent defects (which are not the tenant's responsibility) and disrepair (which typically is).

• Inherent Defects: Deficiencies in original design, construction, or materials
• Disrepair: Deterioration resulting from lack of maintenance or damage
• Grey Areas: Where inherent defects contribute to disrepair
• Evidence Required: Expert surveyor assessment and historical records

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 (commonly known as the Dilapidations Protocol) was introduced in 2012 to streamline the resolution of dilapidations disputes.

Stage 1: Schedule of Dilapidations

The landlord serves a Schedule of Dilapidations on the tenant, detailing all alleged breaches of covenant. This must be quantified and accompanied by a Quantified Demand showing the landlord's financial claim.

• Must itemize each breach with reference to lease clause
• Include costs for each item of repair
• Provide supporting evidence (photos, expert reports)

Stage 2: Tenant's Response

The tenant has 56 days to respond with a detailed Scott Schedule (a table showing items in dispute). The tenant's surveyor will assess which items are valid breaches and challenge any unreasonable claims.

Stage 3: Negotiation Period

Both parties must engage in genuine negotiation to resolve the dispute. This may involve without prejudice meetings, site visits with both surveyors, and exploration of commercial settlement options.

Stage 4: Alternative Dispute Resolution (ADR)

If negotiation fails, parties should consider ADR methods such as mediation before proceeding to litigation.

Key Lease Clauses Affecting Dilapidations

Full Repairing & Insuring (FRI)

Tenant responsible for all repairs including structural, external, and internal. This gives the highest liability - tenant must maintain property in good condition regardless of age or inherent defects (subject to case law).

Internal Repairing Only

Tenant responsible for internal repairs and decorations only. Landlord retains responsibility for structure and exterior - common in multi-let buildings.

Repairing to Standard

Keep property in same condition as at start of lease (with Schedule of Condition). This protects tenant from liability for pre-existing disrepair - highly recommended for older properties.

Yield Up Clause

Return property in specified condition at lease end. May require removal of alterations, reinstatement of original features, full redecoration.

Limiting Dilapidations Liability: Section 18 Diminution

Section 18 of the Landlord and Tenant Act 1927 provides important protection for tenants. It states that damages for breach of a repairing covenant cannot exceed the diminution in value of the landlord's reversion.

Real Example: A landlord served a Schedule of Dilapidations claiming £250,000 for extensive repairs to a commercial warehouse in Hounslow. The tenant's lease had expired, and the landlord planned to demolish the building within 12 months to redevelop the site.

Our approach was to obtain evidence of the landlord's redevelopment plans, instruct a valuation expert to assess diminution in the landlord's reversion, and demonstrate that since the building would be demolished, the repairs had no value.

Outcome: The claim was settled for £15,000 (representing only the value of remedying breaches affecting the tenant's use during the notice period), saving the tenant £235,000.

The Role of a Schedule of Condition

A Schedule of Condition is a detailed photographic and written record of a property's condition at the start of a lease. It's one of the most effective ways to limit dilapidations liability, particularly for older or already-deteriorated properties.

Benefits for Tenants

• Limits liability to maintaining (not improving) condition
• Provides clear evidence of pre-existing defects
• Reduces dispute potential at lease end
• Essential for older properties with existing issues

Benefits for Landlords

• Clear documentation of baseline condition
• Reduces scope for tenant disputes
• Facilitates fair assessment of deterioration
• Speeds up end-of-lease negotiations

Dilapidations in West London: Local Considerations

Properties in West London, particularly in areas like Richmond, Twickenham, and Kingston, often have unique characteristics that affect dilapidations claims:

• Conservation Areas: Properties in conservation areas may have restrictions on alterations and repairs, affecting reinstatement obligations
• Listed Buildings: Grade II listed commercial properties have special considerations for repairs and alterations
• Period Properties: Victorian and Edwardian commercial buildings are common and may have inherent defects arguments
• High Property Values: West London's high property values can increase diminution and supersession arguments
• Redevelopment Pressure: Many areas are subject to regeneration, strengthening supersession defenses

Typical Dilapidations Costs

Our experience shows that early expert involvement typically reduces overall costs and achieves better outcomes for both parties. Investing in professional surveying advice at the start can save tens of thousands in avoided disputes.

Twickenham Surveyors' Dilapidations Services

Whether you're a landlord seeking to protect your property investment or a tenant facing a dilapidations claim, Twickenham Surveyors provide comprehensive support:

For Landlords

• Pre-lease Schedule of Condition preparation
• Interim dilapidations inspections and notices
• Terminal Schedule of Dilapidations preparation
• Quantified Demand calculations
• Negotiation and settlement support
• Expert Witness services for litigation

For Tenants

• Pre-lease Schedule of Condition to limit liability
• Mid-lease condition assessments
• Response to Schedule of Dilapidations
• Scott Schedule preparation
• Section 18 diminution assessments
• Supersession evidence gathering
• Settlement negotiation

Need Dilapidations Advice?

Whether you're a landlord or tenant, early expert advice can save significant costs and stress. Our RICS-qualified surveyors have extensive experience with commercial dilapidations throughout West London.

Get Expert Dilapidations Advice

Frequently Asked Questions

Can a landlord claim for improvements as well as repairs?

No. The landlord can only claim for breaches of covenant - they cannot use dilapidations to obtain improvements or betterment beyond the condition required by the lease. This is a common area of dispute that our surveyors regularly identify and challenge.

What happens if I can't afford to pay a dilapidations claim?

It's crucial to engage early with expert surveyors who can challenge unreasonable claims and negotiate settlements. Many initial claims are significantly reduced through proper negotiation. Payment plans may also be negotiated. Ignoring the claim is the worst option as it may lead to litigation and additional costs.

How long does the dilapidations process typically take?

Following the Protocol, the minimum timeframe is around 3-4 months (56 days for response, followed by negotiation period). In practice, most claims settle within 6-12 months. Complex cases or those proceeding to litigation may take 12-24 months or longer.

Should I get a Schedule of Condition at the start of my lease?

For any property that is not brand new, we strongly recommend a Schedule of Condition. The cost (typically £1,500-£4,000) is minimal compared to potential dilapidations liability at lease end. It's particularly essential for older properties or those with existing defects.