Your lease will require you to maintain your premises in a certain state of repair and decoration. If the condition of the premises falls short of the standards specified in the lease, the landlord can serve a schedule of dilapidations. This page explains more about dealing with dilapidations and covers:
The schedule of dilapidations is drawn up by the landlord’s surveyor. It summarises where you are in breach of your repairing obligations.
You are most likely to be served with a schedule of dilapidations at the end of your lease (this is known as a ‘terminal’ schedule). The landlord will serve a terminal schedule in the last few months of the lease – or after the lease has expired. However, the landlord can also serve an ‘interim’ schedule of dilapidations during the lease.
The key thing to remember is that you can negotiate with the landlord to reduce the scope and costs of dilapidations. You can engage a building surveyor who specialises in dilapidations to help you with this.
When the landlord first serves the schedule of dilapidations, it may not include costs for the work proposed. If this is the case, the landlord will later prepare a costed schedule.
You may wish to engage a surveyor to help you properly assess the dilapidations requirements your landlord is asking of you.
Back to top
What can dilapidations include?
The schedule of dilapidations should only include items that the tenant is required to repair under the terms of the lease. The cost claimed for the repair work must be reasonable.
Your lease will determine what elements of the building you are responsible for repairing and decorating. It will also explain the standard to which they have to be maintained:
a full repairing and insuring lease requires the tenant to pay for all repairs to the property. This can include responsibility for structural problems or replacement of large items such as the roof or windows.
an internal repair and decoration only lease means that the tenant is responsible for repairing the interior of the premises only
Leases may include an obligation to put the premises into a better state of repair than when you took them on. If your lease incorporates a schedule of condition (a record of the state of a property at the start of a lease), you will, subject to the wording of the schedule, only be responsible for returning the premises to the condition they were in when you took them on. If you have a short one-year lease, you might have no repairing obligations or have your obligations limited to ‘fair wear and tear’.
Be aware that your lease may require you to remove alterations that you have made to the premises, even if you consider them to be improvements.
The cost of dilapidations can include:
- the cost of repairs
- the difference in value of the premises with and without the repairs
- losses to the landlord resulting from a delay in selling or re-letting the premises whilst repairs are carried out
- the fees for the landlord’s solicitor and surveyor.
Back to top
What can’t be included in dilapidations?
The landlord should be clear about his future plans for the premises when claiming for dilapidations. The tenant should not be expected to pay dilapidations if the premises are due to be demolished. Equally, the landlord cannot expect the tenant to finance improvements to the premises.
How can a tenant challenge an unreasonable dilapidations bill?
You can engage a surveyor who specialises in dilapidations to review the schedule and advise you whether it is reasonable. The surveyor can:
Back to top
- negotiate on your behalf to reduce the cost of dilapidations
- get alternative quotes for work that needs to be done
- put you in touch with reputable firms to carry out the work
When is dilapidations work carried out – and who does it?
If the work required is likely to be disruptive or pose health and safety risks, you may need to consider moving out shortly before the end of your lease to allow time for dilapidations work to be completed.
Once the lease has ended, you (as tenant) cannot re-enter the premises to carry out the work, so the landlord will carry out the work and pass on the bill. You are likely to spend less on the work if you oversee it yourself before the lease expires. A landlord will be less concerned about getting the best deal on the work if he is going to be billing the costs to you!
Back to top
Dilapidations and break clauses
The right to exercise a break clause is often dependent on the tenant having complied with the lease. This can include a requirement for all clauses within the lease, including repairing obligations, to be met. Landlords can therefore try to refuse breaks in the lease if the tenant is in breach of their repairing obligations.
If you intend to operate a break clause, it is crucial to check the wording of the lease – ideally 12 months in advance. This will give you time to put in place a plan to ensure you comply with all relevant lease obligations. It will also allow you some leeway if you need to vacate the premises earlier than you anticipated in order for dilapidations works to be carried out.
Back to top