Dilapidations: What You Agree to Hand Back

A schedule of dilapidations is a claim, not a bill — an opening position prepared by the landlord's surveyor, on the landlord's assumptions. Section 18(1) of the Landlord and Tenant Act 1927 caps the repair part of it at the drop in the value of the landlord's reversion, and its second limb can wipe that part out entirely where the building is coming down anyway. There are 4 things to settle before you sign, and the cheapest is a dated, photographed schedule of condition attached to the lease.

Most tenants meet the word "dilapidations" once: at the end of a lease, when a document arrives listing room by room everything the landlord says was not repaired, redecorated or removed, with a price against each line.

By then the decisions that produced it are years old. This page is about the ones you can still make. Our commercial fit-out page sets out how we work on the delivery side, and the guide to what an office fit-out costs names dilapidations as one of four costs that sit outside a per-square-foot rate. The same discipline applied to a builder's quote is in two quotes, same job: a number you have not tested is a position, not a price.

Three things about that document

One: it is a claim, not a bill

It is prepared by a surveyor acting for the landlord, priced on the landlord's assumptions about what the work involves and what it costs. That is not improper — it is what an opening position looks like. But tenants pay those figures every year without ever testing them, and testing them is ordinary practice rather than a fight. The RICS Dilapidations Protocol expects both sides to set out their positions and narrow them.

Two: there is a statutory ceiling on the repair claim

Approved Documents are statutory guidance to the Building Regulations 2010 for England. Compliance is judged against the Requirements in Schedule 1; the Approved Document shows one way of meeting them. Your building control body has the final word on your specific building.

The ceiling is a valuation question, not a building-cost question. What is the building worth with the disrepair, against what it would be worth without it? Those two numbers are often a long way apart, and a schedule priced line by line rarely shows you that calculation anywhere.

Three: if they are redeveloping, the repair claim may vanish

The second limb of the same section is the one that surprises people. If it is shown that the premises would have been pulled down anyway, or structurally altered so as to make the repairs worthless, no damages are recoverable for those repairs. Surveyors call it supersession.

So the question to ask is not only "is this priced correctly" but "what are you actually going to do with this space after I leave?" If the floor is being stripped the week after you go, a schedule asking you to redecorate it deserves a question rather than a cheque.

Before you sign

Much of the reinstatement obligation is not written in the lease at all. It is written into the Licence to Alter you sign before the fit-out starts — the same document that usually sets your start date. What the licence gives you, and what it does not covers section 19(2), the difference between a qualified and an absolute covenant, and who ends up paying the landlord's surveyor.

1. 01Get a schedule of conditionA dated, photographed record of the space on the day you take it, attached to the lease and agreed by both sides. Without one the repairing covenant is read against the building the lease describes rather than the one you actually found, and you can be asked to hand back premises in better order than you received. The cheapest thing on this page and the most often skipped.
2. 02Read the reinstatement clause, not the repair clauseThey are different obligations. The repair clause governs the condition of what is already there. The reinstatement clause decides whether the fit-out you are about to install has to come out again at the end, at your cost — which means paying for it twice.
3. 03Look at the yielding-up wordingSome leases require the premises returned to their original Cat A condition. That can mean stripping out a fit-out you have only just finished paying for, and it is a sentence rather than a section, so it is easy to read past.
4. 04Establish who owns the landlord's fit-outIf the space came fitted, get it in writing that their fit-out is theirs and stays. Inheriting a previous tenant's Cat B without inheriting the paperwork is how a tenant ends up liable to remove something they never installed.

When the schedule arrives

1. 01Do not treat it as finalInstruct your own surveyor. The document you received is one side's position, and it was always going to be.
2. 02Test it against section 18Diminution in the value of the reversion, not the cost of the works — and check whether the second limb applies at all before arguing about line items.
3. 03Ask what the landlord intends to do with the spaceIn writing. Their redevelopment plans are directly relevant to what they can recover, and the answer changes the negotiation rather than merely informing it.
4. 04Price the works properlyOn many schedules the cheaper answer is to do the work yourself before you leave, rather than pay the landlord's figure for someone else to do it afterwards. That is a comparison worth running before you concede the number.

That last one is the whole negotiation in miniature, and it is the item most tenants skip because it looks like extra work at the worst possible moment. What an office strip-out involves, and what it is priced on sets out the three things that actually move that figure — and the statutory waste duty that stays yours whoever carries the material away.

Why a builder is writing this

Because the record that protects you is made on site, at the start, by whoever is working in the building.

We deliver commercial fit-out in occupied and operational buildings — Cat A and Cat B works inside the V&A's Europe 1600–1815 galleries, and retail on Sloane Street. In every one of them, the thing that protected everybody was a dated record of the condition of the space before anyone touched it. That is the same document that decides a dilapidations claim years later, and it costs almost nothing to make on the day.

2VP is the builder, not a marketplace: one contract, one named project lead, and no introducer fee stacked on the build cost. When we strip out or fit out, the before-and-after record comes as part of the job rather than as an extra.

If a schedule has already landed on your desk, the useful thing a builder can give you is the number underneath each line — what the item actually costs to carry out, as against what the landlord's surveyor assumed. That is what office dilapidations in London covers: the schedule priced against its own numbering after a site survey, early enough for your own surveyor to negotiate with.

The one line to take away

The thing to check before you sign is not the rent. It is what you have agreed to hand back, and in what condition — and whether anybody wrote down how you found it.