Dilapidations Guide: Landlords

June 23, 2023

All dilapidations disputes can ultimately end in court. It is therefore important to protect your position in the event that you eventually commence proceedings so you should take advice early.

How important is timing?

Before the end of the lease you may need to serve Notices on your tenant in order to oblige them to reinstate alterations made to the premises. While your entitlement to start a court claim will not become legally time-barred for six or 12 years (depending on how the lease was signed) after expiry of the lease, the Dilapidations Protocol expects that you will issue a Schedule of Dilapidations and a Quantified Demand within 56 days after the end of the lease term. However, the lease may contain a clause that sets out a specific timetable so you need to check it carefully. If you have sent a Schedule of Dilapidations to the tenant before the end of the lease term you are expected to update it at the end of the lease term.

What do I need to send the tenant?

We can prepare a Schedule of Dilapidations to send to the tenant (the terms of the lease might dictate how it is to be sent). Before we prepare the Schedule of Dilapidations, we need to know what your intentions for the premises are at lease end so we can endorse the Schedule of Dilapidations as required by the Dilapidations Protocol.

How is the schedule of Dilapidations calculated?

The Schedule of Dilapidations will set out the cost of the works the tenant should have completed. The Quantified Demand should not exceed your likely loss. If the tenant’s breaches of lease obligations have not actually caused you to suffer a loss then you must not include those items. Although the reasonable cost of works that the tenant should have undertaken is likely in many cases to be the main guide to the amount of compensation, the law does not allow this to exceed the amount by which the property had been devalued by the breaches.

What happens when the Schedule is served?

The former tenant should send you an Endorsed Response within 56 days of receiving the Schedule of Dilapidations/Quantified Demand. Once you receive the Response you will understand the scope of any disputed items. Normally, we can narrow the differences sufficiently to recommend a settlement figure however if such a settlement is not possible then you may be faced with litigation to recover the damages.

How are disputed resolved?

The Dilapidations Protocol states that the parties should consider alternative dispute resolution (ADR). Surveyor negotiation is an established form of dispute resolution, but the Dilapidations Protocol also requires that the Landlord and Tenant consider ADR. Neither party can be forced to undertake ADR but the court, if the claim is pursued that far, may expect this to have been attempted and unreasonable refusal to do so may be taken into account by the court when considering its award of costs. ADR is a cheaper means of settling the dispute than a court hearing. ADR suitable for dilapidations include Expert Determination (a single expert makes a binding decision) Mediation (the parties, their advisers and a mediator meet, with the mediator trying to broker a mutually acceptable settlement on the day), or Arbitration (a private form of dispute resolution with processes similar to litigation but governed by the Arbitration Act).

What happens if I need to go to Court?

Dilapidations cases can be very complex and potentially very expensive because of the number of experts and specialists that the judge may need to hear from.

Where the Landlord has not completed the dilapidations works but is proposing to litigate to recover damages, a specialist valuation report (diminution valuation) will need to be compiled by a specialist valuer. Other specialists may be required to advise on lifts, air conditioning, cladding and land contamination. Barristers will be engaged to review the case and to act on behalf of each party. Expert witnesses will be required and it is normal for the parties’ surveyors to be engaged as expert witnesses at which point they stop acting for you and start acting for the court.

For a detailed consultation please contact one of our team.

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Robert Huitson

Durham Office Manager

Robert Huitson services all the dilapidations requirements of corporate occupiers and landlords within the North East area. He has experience in all core building surveying areas, but specialises in dilapidations and project management.

Alan Grant

Edinburgh Office Manager

Alan Grant is a chartered building surveyor with over 30 years of experience in all aspects of Building Surveying. He has worked both in Scotland and England providing a full range of Building Surveying services to public sector bodies, corporates and private sector property owners.

Neil Orton

Birmingham Office Manager

Neil Orton offers landlords, tenants and their consultants an exceptional standard of Dilapidations surveying. He will personally handle your enquiry and has an objective to achieve the best possible outcome for his clients.

Anthony Pugh

Swindon Office Manager

Anthony Pugh has over 30 years of experience in the property industry specialising in Dilapidations and was a member of the Steering Group of the RICS Dilapidations Forum between April 2007 and July 2010.

Anthony’s wealth of experience brings a commercially aware and practical approach to his work.

Anthony Cross

London and East of England Office Manager

Anthony Cross operates in London and East Anglia. He specialises in Dilapidations and takes pride in providing a thorough and equitable service to Landlords and Tenants. Anthony also provides comprehensive Photographic Schedules of Condition as well as Video Schedules.

Laurence Davis

Chairman

Laurence has a proven track record of creating dynamic successful businesses in a wide variety of industries over a sustained period of time. He has an impressive portfolio of properties and therefore has first hand experience of the Dilapidations market and its challenges.

Paul Lande

CEO

Paul’s expert analytical and visionary problem solving skills coupled with attention to detail has established Dilaps UK as the market leader in all aspects of Dilapidations, since he founded the business in 2009.

Anthony Lorenz

Strategic Marketing Director

Anthony is one of the best-known agents in the UK property industry with over 55 years’ experience in commercial property specialising in professional work including dilapidations. With a host of landlord and tenant clients and a wealth of knowledge in service marketing, Anthony heads up National Marketing for Dilaps UK.

Anthony enjoys spending time in his Mayfair home entertaining clients and friends in the evenings. On weekends, he retreats to his 13th-century country home, where he enjoys an equestrian lifestyle and plays competitive polo throughout the summer.