Dilapidations: A Plain-English Guide for Landlords

Dilapidations are the breaches of a tenant's obligations to repair, decorate and reinstate the property. At the end of a lease they can be worth a great deal, but the amount you can actually recover is capped, so it pays to understand how it works.

Where dilapidations come from

Under a repairing lease the tenant must keep the property in repair, often redecorate, and hand it back in the state the lease requires, removing their alterations. Where they fall short, the landlord has a dilapidations claim.

Interim and terminal claims

• An interim claim is made during the lease, where disrepair is serious enough to threaten the property. See interim dilapidations.
• A terminal claim is made at or after the end of the lease, and is the more common one.

The claim is capped

Crucially, damages are capped at the diminution in the value of the landlord's reversion caused by the breach, under section 18(1) of the Landlord and Tenant Act 1927. If you are going to redevelop or the market does not value the repairs, the cap can reduce the claim to little or nothing. See the section 18 cap.

How it runs

The landlord's surveyor prepares a schedule of dilapidations and a quantified demand, the tenant responds, and the parties negotiate under the pre-action protocol. A chartered building surveyor and a solicitor are the right people to run a real claim, because the recoverable figure turns on a diminution valuation, not just the cost of works.

What are dilapidations?

Breaches of a tenant's obligations to repair, decorate and reinstate the property, most often claimed at the end of a lease.

Is a dilapidations claim capped?

Yes. Under section 18 of the Landlord and Tenant Act 1927, damages are capped at the diminution in the value of the landlord's reversion.