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Dilapidations and End-of-Lease Repairs: A Landlord's Guide
At the end of a commercial lease, the condition of the property — and who pays to put it right — is one of the most contested areas in property law. Dilapidations disputes between landlords and tenants are common, often expensive, and frequently mismanaged.
This guide covers what landlords need to understand about the process, the legal framework, and how to handle the works that follow.
What are dilapidations?
Dilapidations are breaches of the tenant's repairing, decorating, and reinstatement obligations under the lease. At the end of the term, the landlord can serve a Schedule of Dilapidations on the tenant identifying all items that fall short of the covenant standard, along with a claim for the cost of remedying them.
The tenant's liability is not simply the cost of the works — it is the lesser of the cost of remedying the breach or the diminution in value of the landlord's interest caused by the breach. This is the key principle established by the Leasehold Property (Repairs) Act 1938 and the common law measure of damages, and it significantly limits what landlords can recover in some cases.
Terminal versus interim schedules
Schedules of dilapidations can be served during the lease (interim) or at or after expiry (terminal). Terminal schedules are the most common and the most significant — they are served within a reasonable period after lease expiry and typically cover all outstanding repair, decoration, and reinstatement items.
The terminal schedule should be prepared by a chartered building surveyor with specialist dilapidations experience. A poorly prepared schedule — with items that can be argued as superseded, or valuations that do not reflect the statutory diminution cap — exposes the landlord to a much weaker negotiating position.
Supersession — the most important concept for landlords
One of the most significant defences available to tenants in dilapidations claims is supersession. This applies where the landlord intends to carry out works to the property after the tenant leaves — works that would undo the repairs the tenant was being asked to carry out.
If a landlord intends to refurbish the property before re-letting, the cost of the tenant's repairs is effectively superseded by the landlord's planned works. The tenant can argue that the landlord suffered no loss from the unrepaired items because those items would have been demolished or altered in the refurbishment regardless.
The practical implication for landlords: the decision about what to do with a property after the tenant leaves must be made early — and ideally before the schedule of dilapidations is served — because it materially affects the strength of the claim.
The role of the Schedule of Condition
Where a schedule of condition was agreed and attached to the lease at the start, it limits the tenant's dilapidations liability to the extent that the property was not in good condition at the beginning. Items that were already in poor condition at lease commencement cannot be recovered.
If no schedule of condition was agreed, the tenant is typically liable for any decline in condition from the full covenant standard — regardless of the state of the property when they took it. This is frequently to the landlord's advantage on older buildings.
Managing the refurbishment after lease expiry
Once the dilapidations dispute is settled — whether by negotiation or at court — the landlord typically needs to carry out refurbishment works to bring the property back to a lettable standard.
This is where a principal contractor who understands commercial refurbishment becomes important. The works are often complex, time-sensitive, and need to be coordinated around lease-void costs and the target re-letting date.
RCB Design & Build handles commercial refurbishment, fit-out stripping, dilapidations repair works, and full space reconfiguration across London — including working to tight programmes where re-letting is the priority.
If you're a landlord managing a lease expiry and dilapidations situation, speak to us. Call +44 7359 872594, email contact@rcbgroup.co.uk, or visit rcbgroup.co.uk.
Kind regards, Vasi J. & rcbGroup team contact@rcbGroup.co.uk www.rcbGroup.co.uk +44 7359 872594 | +44 7448 189592 FMB | TrustMark | Checkatrade | TrustATrader Verified. Insured. Trusted.