What Are Dilapidations in Property? Your Essential Guide
- AMS SURVEYS
- Jul 15
- 4 min read
Updated: Oct 15
Let’s face it, property leases can feel like a maze. One minute you’re celebrating a new commercial space, and the next, you’re hit with something called a “dilapidations claim.” Sounds serious, right? Well, it can be, but don’t worry, we’re here to demystify it all.
Whether you’re a landlord protecting your asset or a tenant closing out a lease, understanding dilapidations is key to avoiding unexpected bills and heated disputes. So, let’s break it all down, plain and simple.
📚 Table of Contents
💡 What Exactly Are Dilapidations?
In the property world, dilapidations refer to breaches of lease terms, particularly those concerning the property's condition. These include obligations to:
Repair damaged or worn-out features
Redecorate the space (usually on a scheduled basis)
Reinstate any alterations made during the lease term
Regulation surveys, testing and maintenance to be compliant.
In simpler terms, if you’re a tenant and you leave the place looking rough or different from how you got it, you could be liable for the costs of putting it back.
🏢 Why Do Dilapidations Matter in a Commercial Lease?
In most commercial leases, you’ll find clear-cut clauses that say what condition the property should be in, both during and at the end of the tenancy.
Here are the four most common types of obligations you’ll run into:
1. Repair
You’ll often see something like “keep the premises in good and substantial repair.” That’s legal speak for “don’t let the place fall apart.”
2. Decoration
Tenants are typically required to redecorate periodically or before vacating, yes, even if you think the exposed brick is “industrial chic.”
3. Reinstatement
Did you knock down a wall or build a new kitchenette? You may have to put it all back the way it was.
4. Regulation / Statutory Compliance
Most commercial buildings require some form of regulatory compliance, such as asbestos management surveys, electrical fixed wire tests, fire and emergency lighting tests, etc. Ensure your records, testing, maintenance, and servicing are up to date and compliant.
Pro Tip: Always read the lease before signing. Better yet, get a professional to look it over.
💸 Do Tenants Always Have to Pay?
Not necessarily. Here's where things get a bit juicy.
At the end of a lease, a landlord may serve a Schedule of Dilapidations. This is a document listing what they believe you’ve failed to do. It may ask you to carry out repairs or pay compensation.
But wait! You’re not always on the hook for the full cost. Here's why:
The landlord can only recover costs based on the actual reduction in the property's value; this is known as the diminution in value.
If they’re planning to redevelop or refurbish anyway, your impact might be negligible.
If you’ve genuinely kept things in good shape, you’ve got a strong case.
Bottom line: Get legal or surveying advice ASAP if a schedule lands in your inbox.
📸 What’s a Schedule of Condition (And Why You Need One)
Imagine renting a flat with a cracked ceiling and rusty pipes, then being charged to fix them when you move out. Not fair, right?
That’s why a Schedule of Condition is your best friend. This is a report (often with photos) that records the property's state at the start of the lease.
Benefits:
Sets expectations from Day 1
Helps avoid being blamed for pre-existing damage
Can save you serious money
For landlords, it ensures tenants know the standards expected of them. For tenants, it’s your shield if disputes arise.
🛠️ How to Handle (and Prevent) Dilapidation Claims
So, what if you’re facing a claim, or worried about one looming?
✅ Top Tips for Tenants:
Review the lease thoroughly – Know your obligations from the start.
Request a Schedule of Condition – If none exists, consider commissioning one.
Conduct mid-lease inspections – Fix minor issues before they snowball.
Negotiate, negotiate, negotiate – Not every item on the schedule is final.
🧰 Landlords Should:
Serve realistic and well-supported claims
Avoid inflating costs beyond the loss in value
Use a qualified surveyor to draft the schedule
Professional support, like from RICS-accredited surveyors, is essential for both sides to keep things fair. The surveyor should complete the dilapidations claim or negotiation in line with the RICS Dilapidations in England and Wales 7th Edition.
🧑💼 Why Expert Help Makes All the Difference
Dealing with dilapidations isn’t a DIY project. Whether you're a landlord or a tenant, navigating leases, repairs, and claims takes experience and technical knowledge.
AMS Surveys is a RICS-regulated consultancy that specialises in:
Lease reviews
Schedule of Condition surveys
Dilapidation assessments
Negotiating claims on your behalf
👉 Visit AMS Surveys Commercial Services for expert guidance tailored to your situation.
📌 Key Takeaways
Let’s recap the essentials:
Dilapidations = Lease breaches involving repair, redecoration, or reinstatement.
Tenants aren’t always liable for everything claimed, especially if the property's value isn’t affected.
Schedule of Condition reports are a smart, proactive step for tenants and landlords alike.
Early planning + professional advice = the best way to avoid or resolve disputes.
❓FAQs About Dilapidations
Q: Can I ignore a Schedule of Dilapidations? A: Not if you want to avoid legal action. You can dispute it, but do so professionally and promptly.
Q: Who pays for dilapidations if a lease ends early?A: That depends on the lease terms and the state of the property at handover. Early termination clauses will outline responsibilities.
Q: What’s the difference between dilapidations and wear and tear? A: Normal wear and tear is expected. Dilapidations go beyond that, think broken fittings or removed partitions.
✨ Final Thoughts
Dilapidations might seem like legal jargon, but they have real financial and legal consequences. By understanding your lease, keeping clear records, and working with the right professionals, you can navigate dilapidations with confidence and clarity.
Need help now? Don’t wait until a claim catches you off guard. Reach out to AMS Surveys for expert support and peace of mind:
