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A dilapidations provision is an amount a commercial tenant sets aside in its accounts to reflect the estimated cost of meeting its repair, reinstatement and decoration obligations at lease end. It gives the business a view of exposure across the life of the lease, supports financial reporting, and provides a basis for negotiation when a landlord schedule eventually arrives.
The provision is supported by a dilapidation report — an assessment by a chartered building surveyor of the likely liability at lease end. For direct advice, see the dilapidations surveyor service.
What It Is
A tenant-side estimate, held in the accounts, of the cost of meeting lease-end repair, reinstatement and decoration obligations.
When It Appears
Ideally from early in the lease, updated annually at year-end and at every material lease or building event.
How It Is Supported
By a dilapidation report from a chartered building surveyor, assessing the condition of the premises against the obligations of the lease.
The key point
A provision is a best estimate, not a fixed bill. Its value lies in being grounded in the actual lease and the actual premises — not in applying a generic rate per square foot that has no connection to either. A dilapidation report is the instrument that provides that grounding.
If you need a dilapidations provision assessed or reviewed for your year-end accounts, send us the lease and a short brief and we will scope a supporting report.
Contact us →What a dilapidations provision is
A dilapidations provision is the amount a tenant expects to spend — whether on physical works, a settlement payment, or a combination — at the end of its commercial lease. It sits in the accounts as a liability and unwinds as the cost becomes known or is paid out.
Unlike the schedule of dilapidations served by the landlord, the provision is an internal planning and reporting figure. It is not a claim. It is the tenant's best internal view of what lease end is likely to cost, based on the lease obligations and the current condition of the premises.
Why the provision matters
- Smooths the cost of lease-end works across the term rather than creating a one-off charge at expiry.
- Supports accurate financial reporting and reduces the risk of surprise adjustments at year end.
- Helps the business make informed decisions on break options, renewals, assignments and exits.
- Provides a stronger negotiating position when a landlord schedule eventually arrives.
- Reduces reliance on last-minute cashflow planning during an already busy exit period.
Need a dilapidations provision assessed?
The appropriate starting point is a dilapidation report from a chartered building surveyor — an assessment of the current condition of the premises against the specific obligations of the lease, producing a figure the accounts can carry and defend. See our dilapidations surveyor service for direct support.
For the detail of how the numbers build up, see the dilapidation costs guide. For the broader context, see the dilapidations guide.
Related knowledge
Compare this article with the nearest matching pages if you want to follow the topic into related surveying questions.
Dilapidations are breaches of the repair, reinstatement, decoration and yielding-up obligations in a commercial lease. This guide covers what they are, the interim and terminal categories, typical obligations, and how landlords, tenants and chartered surveyors work through a claim.
A practical guide to dilapidation survey reports — what a good report contains, when tenants and landlords should commission one, how it differs from a formal schedule of dilapidations, and what makes a report useful in practice.
A practical guide to dilapidation costs — the factors that drive them, how surveyors calculate them, the statutory caps that limit recovery, and how to manage exposure across the lease rather than at the end of it.
A practical guide to what a schedule of dilapidations is, what it includes, when it is served, and how repair, reinstatement, redecoration, Section 18, and related lease rights affect the claim.
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Dilapidations
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Schedules of condition
Condition recording for lease commencement, pre-works evidence, and later protection against dispute over pre-existing condition.
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