Managing Dilapidations Proactively

The best way to handle dilapidations is by Managing Dilapidations Proactively – anticipating and managing issues before they turn into costly disputes.

Here are best practices for managing dilapidations proactively for both Tenaants and Landlords :

For Tenants - Managing Dilapidations Proactively:

Understand Your Lease from Day One

Before signing, get professional advice on the repairing and yielding-up obligations. If possible, negotiate unreasonable terms out of the lease from the start. For example, if the property is old, try to limit your liability with a Schedule of Condition, or avoid an obligation to put the property in better condition than at the start of the lease.

Secure a Schedule of Condition

This cannot be stressed enough for tenants of second-hand or older premises.

A professionally prepared schedule (with photos) attached to the lease can cap your liability to the property’s initial state. Without it, you could be forced to fix even pre-existing disrepair.

Regular Maintenance Program

Do not defer maintenance thinking you’ll handle it at lease end. Small issues can grow into major expenses if left unchecked. Implement a planned maintenance schedule during your tenancy – for example, periodic servicing of mechanical systems, prompt repairs of leaks, and repainting high-wear areas at intervals. This reduces the backlog of issues at lease end and can prolong the life of building elements.

Keep Records

Maintain records of all repairs, replacements, servicing, and approvals for alterations. If you fixed a roof leak or serviced the HVAC, keep invoices and reports. These records can serve as evidence that you complied with obligations (or that certain disrepairs occurred despite proper maintenance).

Mid-Term Dilapidations Review

For long leases, consider conducting interim dilapidations surveys (say at the halfway point). These are like health-checks – a surveyor can identify issues you should address now.

Managing dilapidations proactively means spending money gradually rather than facing a huge claim later.

Also, respond to any Interim Schedule served by the landlord – don’t ignore it, as that could weaken your negotiating position later.

Engage Early for Lease End

Well before the lease expires (6–12 months prior), hire a dilapidations surveyor to forecast your liability. This allows time to decide: will you do the works or negotiate a settlement? Early engagement also means you can schedule works at a convenient time, minimizing disruption if you’re still occupying.

Consider Doing the Works vs. Paying Damages

There’s a strategic choice at lease end. Doing the works yourself can be cheaper (you can shop around contractors) and you avoid paying the landlord’s professional fees on top.

On the other hand, if timing is tight or works would disrupt your business, you might leave and negotiate. Evaluate the cost difference.

Sometimes tenants do a bit of both – e.g., do the easy fixes and negotiate on the big-ticket items.

Communicate with the Landlord

If you know you can’t do certain repairs before leaving, discuss this with the landlord early. They may prefer a cash settlement or might allow you access after lease end for a short period to finish works (in a formal “permit to work” arrangement). Early communication can build goodwill and lead to a more amicable settlement.

Budget for Dilapidations

Financially, set aside funds during the lease (particularly if it’s a long lease) for end-of-term dilapidations. This could be an internal accrual or just a planned expense – but don’t let it catch you by surprise.

Break Clauses

If you have a break clause conditional on complying with covenants (including repair), treat that like a lease end – you must repair/paint as required before the break date.

Failure to do so can mean the break is ineffective. Always seek advice well in advance of a break option date to ensure compliance.

For Landlords - Managing Dilapidations Proactively:

Set the Stage with a Good Lease

A landlord’s ability to enforce dilapidations starts with a well-drafted lease. Ensure repairing obligations are clearly stated.

If you agree to a Schedule of Condition, make sure it’s thorough. Include clauses allowing you to inspect and carry out default works (charging the tenant) if possible, as leverage.

Document Condition at Lease Start

Even if there’s no formal schedule of condition, landlords should keep records (photos, reports) of the property’s condition at handover. This will be invaluable years later to prove a tenant made things worse (or not).

Regular Inspections

Conduct inspections periodically (e.g., annually or biannually). Use these opportunities to remind tenants of any obligations. Early intervention can prevent serious disrepair. If necessary, serve an Interim Schedule of Dilapidations as a warning shot.

Maintain Landlord Responsibilities

While tenants handle most repairs in FRI leases, landlords should not neglect the parts they are responsible for (roof, structure, common areas). Failure to maintain these can complicate or reduce a dilapidations claim.

Plan for Lease End

As lease expiry approaches, decide on your strategy. Managing dilapidations proactively means assessing whether you want the tenant to do the work or settle with cash. Supersession considerations may influence whether to pursue claims for certain works.

Obtain a Professional Dilapidations Survey

Instruct a qualified building surveyor to prepare the Terminal Schedule soon after lease end. A good surveyor will produce a detailed schedule that can withstand scrutiny and help you quantify a realistic claim.

Adhere to the Protocol

Serve your schedule and quantified demand within the recommended timeframe (56 days). Be honest about your intentions regarding future works. Transparency can support legitimate claims for loss of value if necessary.

Engage in Without Prejudice Negotiations

Once the tenant responds, engage constructively. Consider obtaining a diminution valuation early if facing a Section 18 defence. Adjust your claim realistically based on professional valuation advice.

Mitigate Your Loss

Take prudent steps after lease end: re-let quickly, carry out necessary repairs, and avoid unnecessary delays. Keep records of actual repair costs to support claims. Managing dilapidations proactively involves demonstrating responsible property management.

Use Expert Advice

Surveyors and solicitors provide essential advice on technical and procedural pitfalls. Engaging professionals ensures a smoother, more successful dilapidations process.

For Surveyors (Acting for Landlord or Tenant):

Follow RICS guidance and the Dilapidations Protocol rigorously.

Maintain objectivity – unreasonable claims or denials hinder resolution.

Ensure all communications and claims are clear, justified, and evidence-based.

Advise clients candidly on strengths and weaknesses.

Keep an open dialogue with opposing surveyors to facilitate settlement.

Conclusion - Managing Dilapidations Proactively

In summary, Managing Dilapidations Proactively involves early action, ongoing communication, and expert input.

By tackling issues before they escalate and approaching the end-of-lease process in a structured way, landlords and tenants can save considerable time and money.

A proactive approach turns dilapidations from a bitter end-game surprise into a manageable, budgeted aspect of property management.

Get in Touch

Need help with a dilapidations matter? Our expert team provides tailored advice to landlords and tenants across the UK.

From initial inspections to final settlement, we bring clarity and confidence to every stage.

Dilapidations Guide for Landlords - Related Resources

Dilapidations Glossary of Key Terms

Understanding Section 18(1) and Diminution Valuations

Supersession in Dilapidations: What It Means for Landlords and Tenants

Contact

Our expert team have extensive experience of dealing with all dilapidations matters. We act for both landlords and tenants, ensuring a global approach to the dilapidations process.

We assist commercial landlords and tenants on all aspects of lease obligations, repair and dilapidations.

We provide specialist surveys, new lease schedules of condition and general dilapidations advice.

For any help or advice on repair obligations, Dilapidations issues; or to commission a schedule of condition for a new lease call us on 020 4534 3132 or contact one of the team :