Dilapidations Claim Defence for Tenants
A terminal schedule of dilapidations is the opening position of the landlord, not the sum you owe. Claims on commercial leases commonly run to tens of thousands of pounds, and the three cases below settled at between 51 and 80 per cent of the figure first claimed. Clayton Ayling, a chartered building surveyor regulated by RICS, tests each item against the lease, the condition evidence and the statutory cap on damages, then negotiates the settlement with the surveyor acting for the landlord.
Received a schedule? Send it with the lease and a structured view of your exposure follows before you respond.
Send the schedule →The First 14 Days After a Schedule Arrives
The Dilapidations Protocol gives a tenant 56 days to respond to a terminal schedule. The first two weeks decide how well that response is built. Nothing in the schedule should be accepted, paid or carried out until the lease and the evidence have been checked.
- Do not reply to the schedule beyond acknowledging receipt. Anything conceded in early correspondence is hard to recover.
- Gather the lease, any schedule of condition, licences to alter, the reinstatement notice if one was served, and photographs taken at the start and end of the term.
- Send the documents for review. The first task is to confirm what the lease requires, because many schedules claim for items the tenant never agreed to.
- Note the dates. Break dates, lease expiry and the date the schedule was served all affect the response.
How a Claim Is Tested
Each item in the schedule is tested in four ways. Items that fail any test are challenged in the response and in the Scott schedule, the document that sets the position of each side against every item.
- The lease. Does the repairing covenant cover the item at all, and does a schedule of condition limit the standard required?
- The evidence. Was the item in that condition at the end of the term, and was it any better at the start?
- The cost. Is the work described proportionate to the breach, and is it priced at a realistic rate for the location?
- The statutory cap. Section 18 of the Landlord and Tenant Act 1927 limits damages to the loss in value of the landlord interest. Where the landlord intends to strip out, refurbish or redevelop, items the works would supersede are not recoverable.
Break Clauses and Early Advice
A tenant who plans to exercise a break clause faces two risks at once. The break can fail if conditions such as vacant possession or payment of rent are not met, and a dilapidations claim follows the break in the same way as it follows expiry.
Advice taken 12 to 18 months before the break or expiry date leaves time to decide whether to carry out works, which is often cheaper than paying the landlord to do them, or to budget for a negotiated settlement. Advice taken after the schedule arrives still reduces the claim, but the options are fewer.
What You Receive and What It Costs
The review starts from the documents. A written fee proposal is issued before any work begins, with a fixed fee for the lease review, inspection and response. Negotiation is charged at an agreed hourly rate or as a further fixed fee once the scale of the dispute is clear.
- A review of the lease and documents, setting out what the tenant is and is not liable for.
- An inspection of the premises against the schedule, with photographs referenced to each item.
- A response and Scott schedule in the Protocol format, with a counter-figure for each item.
- Negotiation with the surveyor acting for the landlord through to a settlement figure.
- Expert witness evidence under Civil Procedure Rules Part 35 where a claim proceeds to court.
The route of a dilapidations claim
Lease end approaches
Repair, reinstatement, and decoration liability starts to crystallise up to twelve months before expiry or break.
Schedule served
The landlord serves a terminal schedule with a quantified demand. Claims commonly run to five and six figures.
Response prepared
Each item is tested against the lease obligations, the evidence, and the statutory cap on damages.
Negotiation
Surveyor-to-surveyor negotiation on a Scott schedule narrows scope, liability, and cost.
Settlement
Savings of up to 50%
of the initial claim value in current case studies.
Lease First
The response starts with what the lease says, not with the schedule. Items outside the covenants are removed before cost is discussed.
Evidence Led
Every challenge is supported by a photograph, a clause or a valuation point. The surveyor acting for the landlord cannot dismiss it as argument.
Settled by Negotiation
Most claims settle between surveyors without proceedings. The three cases below settled at £18,000 to £22,000 below the sum first claimed.
Tenant Claims Settled
Case Study 1 — Tech SME, Central London: Break Clause and Terminal Dilapidations
A technology SME occupying commercial premises exercised a tenant break clause and subsequently received a terminal schedule of dilapidations from the landlord. We were instructed to review the lease, inspect the property, and analyse the claim in detail.
Our response identified elements of the claim that did not align with the tenant’s contractual obligations. Through structured review and negotiation, the initial claim of approximately £45,000 was reduced to around £26,000.
That outcome represented an approximate saving of £19,000 and demonstrates the value of disciplined lease interpretation and evidence-led negotiation when break clauses and terminal claims overlap.
Case Study 2 — Commercial Warehouse, South East London: Tenant Negotiation and Cost Reduction
We acted for a tenant in relation to a commercial warehouse schedule of dilapidations, reviewing the landlord’s allegations, inspecting the unit, and assessing the scope of liability under the lease.
We interrogated the basis of the claimed works and cost allowances, then negotiated a revised position with the landlord’s surveyor. The demand was reduced from approximately £88,000 to £70,000.
The result was a significant saving for the client and highlights the importance of prompt professional review where a landlord’s position appears overly broad or aggressively costed.
Case Study 3 — Office Space, Great Portland Street: Substantial Reduction in Terminal Claim
We were instructed by a tenant following service of a terminal schedule for office premises on Great Portland Street. After reviewing the lease and the landlord’s claim, we carried out an inspection to compare the allegations against actual condition.
Several items were found to be unsupported by the evidence or beyond the true repairing obligations in the lease. We challenged the claim line by line and negotiated directly with the landlord’s surveyor.
The initial claim of approximately £45,000 settled at £23,000, creating an approximate saving of £22,000 for the client.
Tenant Claim FAQs
Answers to the questions tenants ask when a schedule of dilapidations arrives.
No. The schedule is the opening position of the landlord. What a tenant pays depends on the wording of the lease, the condition evidence, the cost of the works claimed and the cap in Section 18 of the Landlord and Tenant Act 1927. Settlements are often well below the figure first served.
The Dilapidations Protocol expects a response within 56 days of service. A longer period can be agreed where the schedule is large or technical evidence is needed. The response should be prepared by a surveyor and set out the position of the tenant item by item.
A Scott schedule is a table that lists each item claimed alongside the response of the tenant and the figure each side puts on it. It is the working document for negotiation and, if the claim proceeds, for the court.
Often it is cheaper, because the landlord adds supervision, contingency and profit when pricing the works. The option is only open while the tenant is still in occupation, and the scope should be agreed with the landlord before work starts so that the works are accepted as compliance with the lease.
Where the landlord intends works that would make the repairs claimed pointless, those items are superseded and are not recoverable. Section 18 also caps the whole claim at the loss in value to the landlord interest. Evidence of the intentions of the landlord is therefore sought early in the response.
The lease review, inspection and response are quoted as a fixed fee in a written proposal before work starts. Negotiation is charged separately once the size of the dispute is clear. In the three published case studies the saving achieved was many times the fee charged.
Received a schedule of dilapidations?
Send the schedule and the lease before you respond. The review sets out what the lease requires, which items fail, and the figure the claim should settle at.