A Guide To Dilapidations

Dilapidations refer to items of disrepair covered by repairing covenants in a commercial lease. The term is often used to describe terminal dilapidations, breaches of the tenant’s obligations relating to the physical condition of the premises at the end of the lease.

A tenant’s liability may arise from:

• Repairing covenants
• Decorating covenants
• Reinstatement obligations for alterations made during the lease
• Yield‑up obligations, requiring the tenant to return the premises in a specified condition

Landlord Remedies for Breach of Repairing Covenants

A lease is a contract, so remedies depend on its specific wording. However, statutory restrictions mean landlords rarely pursue damages for disrepair during the term. Instead, if the landlord wants the property back, they may seek forfeiture.

To forfeit for breach of a repairing covenant:

• The lease must contain an express right of re‑entry (almost always present).
• The landlord must serve a Section 146 Notice, identifying the breach, requiring remedy, and requesting compensation.
• Repairing breaches are usually remediable, so the notice must allow the tenant to carry out the repairs.

A landlord may unintentionally waive the right to forfeit by treating the lease as ongoing—for example, by demanding or accepting rent while knowing of the breach.

Section 146 Notices are often used tactically to prompt tenant action, even where forfeiture is not intended.

Jervis v Harris Clauses

Many leases include a Jervis v Harris clause, allowing the landlord to:

• Enter the premises during the term
• Carry out repair works
• Recover the cost from the tenant as a debt, not damages

This avoids deterioration and sidesteps statutory limits on damages. In some cases, landlords can obtain a court order requiring the tenant to carry out repairs.

Dilapidations at the End of the Lease

After expiry, damages are generally assessed as:

• The reasonable cost of the works
• Loss of rent during the period required to complete the works

Claims must be reasonable – landlords cannot obtain a windfall where minor defects cause minimal actual loss.

Section 18(1) Landlord & Tenant Act 1927

Damages for breach of a repairing covenant are capped at the diminution in value of the landlord’s reversion caused by the breach.

Landlords may also recover:

• Loss of rent (if the property could not be re‑let due to disrepair)
• Professional fees (surveyors, lawyers), often as a contractual debt if the lease allows

Evidence and Procedure

At lease end, the usual process is:

1. Landlord instructs a surveyor to prepare a Schedule of Dilapidations.
2. Tenant may instruct their own surveyor to prepare a formal response.
3. Both documents set out:
   • Required works
   • Whether they breach the lease
   • The value placed on each item

Key Issues for Tenants

Tenants should:

• Check the validity of any notices (e.g., Section 146 Notices).
• Confirm whether the alleged repairs are actually their responsibility.
• Consider tactical issues, such as reinstatement timing and notice requirements.
• Seek specialist legal advice for substantial claims.

Dilapidations claims often start high but settle lower—usually after input from specialist surveyors and lawyers.

Frequently Asked Questions (FAQs)