Who’s Responsible for Dilapidations in a Lease Agreement?
If you’re leasing a commercial property, you might have come across the term dilapidations. It refers to repairs or maintenance that a tenant may be required to carry out—either during the lease or at the end of it. But whose job is it really? Tenant or landlord?
Let’s break it down.
What Are Dilapidations?
Dilapidations cover the physical state of a rented property. They usually relate to the tenant’s failure to keep the premises in good condition, as outlined in the lease agreement. Think: broken light fittings, damaged plaster, worn carpets, or neglected maintenance.
A landlord might raise a schedule of dilapidations when they believe the tenant hasn’t kept to their obligations. This can happen during the lease or when the lease ends.
So, Who’s Responsible?
In most cases, the tenant is responsible for dilapidations—but it all comes down to what’s written in the lease.
If the lease includes a full repairing obligation, the tenant must return the property in good condition, even if it wasn’t in great shape to begin with. But some leases limit that responsibility with things like a schedule of condition, which documents the property’s state at the start of the lease.
The landlord, on the other hand, is usually only responsible for structural issues or repairs that aren’t the tenant’s duty under the lease.
What Happens at the End of a Lease?
When a lease ends, landlords often serve a terminal schedule of dilapidations. This lists the repairs or reinstatement work the tenant is expected to carry out, along with estimated costs.
At this point, tenants can either:
- Carry out the work themselves, or
- Settle the claim financially (called a dilapidations settlement).
It’s not uncommon for this process to involve surveyors, legal reps, and sometimes negotiations about what’s fair.
Can Tenants Dispute a Dilapidations Claim?
Yes—and they often do.
Disputes usually arise when:
- The landlord demands repairs that go beyond the tenant’s obligations
- There’s no schedule of condition to show what the place was like at the start
- The tenant believes the landlord won’t actually suffer a loss
This is where expert advice becomes crucial. A building surveyor can help determine the real cost and extent of necessary works, and a solicitor can help negotiate a fair outcome.
Why It Matters to Get This Right
Dilapidations claims can run into the tens—or even hundreds—of thousands of pounds. For tenants, getting the right advice early can protect against unexpected costs. For landlords, ensuring the lease is watertight and accurately reflects responsibilities helps avoid drawn-out disputes.
Final Tip: Read the Lease Carefully
The lease is king. Whether you’re signing, renewing, or coming to the end of a lease, make sure you understand the repairing and reinstatement clauses. If you’re unsure, don’t guess—speak to a legal advisor or property consultant who knows the ins and outs of dilapidations.
FAQ Section
What are dilapidations in a lease agreement?
Dilapidations refer to the breaches of lease covenants relating to the condition of the property, typically involving disrepair or failure to maintain.
Who pays for dilapidations at the end of a lease?
Usually, the tenant is liable for dilapidations unless otherwise stated in the lease terms or if a Schedule of Condition limits liability.
Can dilapidations be negotiated?
Yes, many tenants successfully negotiate dilapidations claims, especially if the property has redevelopment potential or the claim is excessive.
What is a Schedule of Condition?
It’s a document with written and photographic evidence of the property’s state at lease commencement, used to limit future liability.
If you would like to discuss more about construction consultants and contractors in London, please call our office on 020 7391 7100 or email us at surveyor@fandt.com.