How do Dilapidations work?

Dilapidations refer to the repairs and maintenance that a tenant is responsible for at the end of a lease. This includes repairing any damage caused during the tenancy and restoring the property to its original condition at the start of the lease.

Tenants should review their lease agreement and familiarise themselves with their obligations regarding dilapidations. It is also important to document the property's condition at the start and end of the lease with a Schedule of Condition.

A Schedule of Condition is a document that records the condition of a property at a specific point in time. It is often used in commercial property leases to provide a benchmark for the property's condition at the start of a tenancy. The Schedule of Condition typically includes a detailed written description of the property and any defects, as well as photographic evidence.

The purpose of a Schedule of Condition is to protect both the landlord and the tenant by providing a clear record of the property's condition at the beginning of the lease. If the tenant is required to return the property in the same condition as it was at the start of the lease, the Schedule of Condition provides a benchmark against which the property's condition can be assessed.

At the end of the lease, the Schedule of Condition can be used to determine whether the tenant has met their obligations regarding the condition of the property. If there are any disputes regarding the property's condition, the Schedule of Condition can be used as evidence in arbitration or legal proceedings.

There are several ways to reduce your dilapidations exposure as a tenant:

1. Maintain the property throughout the tenancy: One of the best ways to avoid a large dilapidations bill at the end of your tenancy is to keep the property in good condition throughout your occupancy. This means addressing any repairs or maintenance issues as soon as they arise, and keeping the property clean and tidy.


2. Review your lease agreement: Your lease agreement will set out your obligations regarding the condition of the property at the end of your tenancy. Make sure you understand these obligations and seek professional advice if necessary.


3. Get professional advice: Working with a dilapidations specialist can help you to understand your obligations and avoid unnecessary costs. They can also advise you on the best way to approach the work required, whether that's completing it yourself or negotiating a financial settlement with your landlord.


4. Complete the work yourself: If you're comfortable taking on the required work, completing it yourself can greatly reduce your financial exposure. Make sure you understand what is required, and seek professional advice if necessary.


By taking these steps, you can greatly reduce your dilapidations exposure and avoid unnecessary costs.

Exiting tenants are often surprised by their dilapidations liability at the end of a tenancy for several reasons:

1. Lack of understanding of lease obligations: Many tenants may not fully understand their obligations under their lease agreement, particularly with regards to dilapidations. They may assume that the landlord is responsible for maintaining and repairing the property, and are therefore surprised to learn that they are liable for the cost of returning the property to the required condition.


2. Failure to maintain the property: Tenants may also be surprised by the cost of dilapidations if they have not maintained the property properly during their tenancy. If the property is returned in a poor condition, the cost of repairing and restoring it can be substantial.


3. Misunderstanding of the property's condition: Tenants may also be surprised by their dilapidations liability if they believe that the property is in a better condition than it actually is. They may assume that they are only responsible for minor repairs or cosmetic improvements, when in fact there are more substantial issues that need to be addressed.


4. Inadequate communication: In some cases, landlords may not communicate clearly with tenants regarding their obligations and the potential cost of dilapidations. This can lead to misunderstandings and confusion, and tenants may be surprised when they receive a large dilapidations bill.


To avoid these surprises, tenants should make sure that they fully understand their lease obligations, maintain the property properly during their tenancy, and communicate clearly with their landlord throughout the lease term. Working with a dilapidations specialist can also help to ensure that tenants are aware of their obligations and can plan for any potential costs.

Tenants can minimise their dilapidations liability by maintaining the property properly during their tenancy, completing any necessary repairs promptly, and seeking professional advice regarding the required works at the end of the lease.

A license to alter is a legal document that allows a tenant to carry out alterations or improvements to a commercial property during their lease term. This document is usually issued by the landlord and sets out the terms and conditions for the proposed works.

In most commercial leases, the tenant is required to obtain a license to alter from the landlord before making any changes to the property. This is to ensure that the landlord is aware of the proposed works and can ensure that they do not negatively affect the property's value or condition.

The license to alter will typically include the following information:

1. Scope of the works: The license will specify the exact nature of the works to be carried out, including any building materials or methods that are to be used.


2. Timelines: The license will set out the time period in which the works are to be completed.


3. Responsibility for costs: The license will typically state who is responsible for the cost of the works, including any ongoing maintenance or repairs.


4. Insurance: The license will outline the insurance requirements for the works and who is responsible for any related claims.


5. Restoration: The license will set out the tenant's obligation to restore the property to its original condition once the lease has ended.


Overall, a license to alter provides a formal framework for tenants to make changes to a commercial property during their lease term. It helps to ensure that the works are carried out in a responsible and safe manner and that the property's value and condition are protected.

Yes, tenants can negotiate the dilapidations settlement with their landlord. This can involve agreeing on the works required and the cost of those works.


Yes, completing the works yourself can hugely reduce the cost of dilapidations. However, it is important to ensure that the works are carried out to a professional standard and that the landlord is satisfied with the quality of the work.

Yes, tenants can use their dilapidations liability as a bargaining tool to negotiate a rent reduction or lease extension. This can be particularly effective if the tenant is willing to carry out the required works themselves.