Dilapidations Claim

What a dilapidations claim is

In the context of commercial property, dilapidations refers to disrepair or damage to leased premises that the tenant is legally obliged to put right under the terms of the lease. A dilapidations claim is the landlord's demand to recover the cost of those repairs, reinstatement works, and decorating obligations — or compensation reflecting the loss caused by the tenant's failure to comply.

Claims fall broadly into two types. Terminal claims arise at or after lease expiry. Interim claims arise during the term, often using a Jervis v Harris clause to recover the cost of works as a debt.

The process of a dilapidations claim

Understanding the sequence clarifies what both sides should be preparing, and when.

• Inspection of the premises by the landlord’s surveyor, in the final months of the term where possible.
• Preparation of a schedule of dilapidations listing breaches, remedies, and estimated costs.
• Service of the schedule, together with a quantified demand, shortly after lease expiry.
• Tenant’s response within a reasonable time, usually 56 days, addressing each alleged breach.
• Without-prejudice negotiation, expert exchange, or a meeting to narrow the dispute.
• Settlement by agreement — or, failing that, issue of court proceedings.

Legal framework

Dilapidations sits at the intersection of contract law, statute, professional protocol and case law. Each layer matters.

• Landlord and Tenant Act 1927 — Section 18 caps damages by reference to diminution in value.
• Landlord and Tenant Act 1954 — affects the timing of lease expiry and renewals.
• Leasehold Property (Repairs) Act 1938 — relevant to interim claims where protection applies.
• Case law — including Jervis v Harris on self-help, and cases on the application of Section 18.
• The Dilapidations Protocol — the Ministry of Justice pre-action protocol under the Civil Procedure Rules that governs how claims should be handled before proceedings.
• The specific lease wording, which always takes priority over general principles.

For the statutory cap specifically, see Section 18 dilapidations. For the self-help route during the term, see the Jervis v Harris clause.

The Dilapidations Protocol

The Dilapidations Protocol is a pre-action protocol published by the Ministry of Justice and forming part of the Civil Procedure Rules. It sets out how a terminal dilapidations claim should be handled before any court proceedings are issued. It is not an RICS document, though surveyors on both sides are expected to follow it.

Following the protocol is not compulsory, but the courts expect it. A party whose conduct departs unreasonably from the protocol can face an adverse costs order in any subsequent proceedings — even where they win on the underlying claim. In practice, failure to engage with the protocol inflates the real cost of the dispute and can tip the economics against an otherwise successful party.

Tenant strategy

• Identify dilapidations exposure 12 to 18 months before lease expiry, not after service.
• Read the lease, any schedule of condition, and licences to alter before commenting on cost.
• Instruct a tenant-side dilapidations surveyor to respond line by line to the landlord’s schedule.
• Consider Section 18 and supersession arguments where redevelopment is in view.
• Decide early whether to carry out the works, settle financially, or mix the two.
• Maintain a documented record of the property condition, works done, and correspondence.

Landlord strategy

• Inspect early enough to gather evidence before the tenant vacates.
• Serve promptly after lease expiry with a quantified demand that reflects real cost, not wish-list refurbishment.
• Be clear about future use of the building, because it shapes the recoverable loss.
• Engage constructively with the tenant’s response rather than restating the opening position.
• Keep the cost basis defensible — valuations, supplier quotes, and the RICS guidance all help.
• Avoid over-claiming, which tends to weaken later positions in negotiation.

Settlement — where most claims end

The vast majority of dilapidations claims settle before proceedings. Settlement discussions usually take place without prejudice and typically narrow the dispute item by item. A structured, evidence-led tenant response usually produces the largest reduction, because it forces the landlord's team to engage with each item on its merits rather than defending a broad opening position.

Settlement terms commonly include a capital payment, apportioned between repair, reinstatement and decoration. Some settlements include a programme of works by the tenant in lieu of payment, particularly where the tenant still has access before lease expiry.

Common mistakes on both sides

• Treating the schedule total as the tenant’s automatic liability.
• Ignoring Section 18 and supersession when the property is being redeveloped.
• Failing to engage with the Dilapidations Protocol on timing and response, which can lead to adverse costs orders.
• Leaving inspection too late, so critical evidence is lost once the tenant vacates.
• Running the claim through lawyers without surveyor-led technical engagement.
• Forgetting that most dilapidations claims settle — and settlement value depends on how the case is prepared, not just pleaded.