Dilapidations FAQs for Commercial Tenants and Landlords

A landlord can start a dilapidations claim against a tenant during the lease term, as it nears expiration, or after the lease has ended.

The claim is usually detailed in a “Schedule of Dilapidations” prepared by the landlord’s chartered building surveyor, listing all alleged breaches, proposed fixes, and costs for doing so, then plus works management fees, and possibly other items like Loss of Rent. This is usually formally “served” on the tenant by the landlord’s solicitor. It will usually reference the Dilapidations Protocol (legal rule book aimed at optimising successful negotiations) and, in so doing, emphasise that the tenant must engage a Building Surveyor to inspect the building and provide a formal “Response” within 56 days.

A Schedule of Dilapidations is usually prepared by a chartered building surveyor. They conduct a property inspection, identify any issues, and detail the necessary remedial work and estimated costs.

This is a legal provision that applies in England & Wales (with similar on IOM and in ROI) which caps the amount of dilapidations damages to the lower of the Cost of Remedial Works negotiated between the Building Surveyors for each side, OR the amount (if any) by which the scheduled items lower (diminish) the property’s open market value. This DV cap is advised and applied by a different discipline of chartered surveyor (the Valuer). The impact on value is usually far lower than the lowest negotiated Cost of Works sum. In short, this is both because not all items affect value (many minor items can aggregate to a considerable sum, but rarely affect value of basic, older buildings), and most vacated properties need upgrade works to optimise lettabilty, which works often snuff out (supersede) claimed remedial works (eg converting vacant floors above a shop to flats – any redecorating of what were store rooms by the previous shop tenant would end up pointless).

There are many distinct types/disciplines, with two necessary in Dilapidations cases:

• Firstly, the Chartered Building Surveyor (CBS) to identify and price/cost breaches (remedial works due to non-compliance with lease covenants to repair, decorate and/or reinstate Tenant’s works).
• Secondly, the Chartered Valuation Surveyor (‘Valuer’) to apply the Section 18 *DV cap.

There is no fixed minimum claim size, but costs and timescales vary. With over 50 years of experience, Dilapsolutions provide tailored advice on options and cost-effectiveness.

• Initial enquiry: The tenant contacts us for an initial, no-obligation discussion. If we can help, we will have a more detailed discussion about lease obligations and the potential liability of dilapidations.
• Formal Instruction: The agreement is signed, the fee structure is confirmed, and survey inspection arrangements are made.
• Property Inspection & Response: One of our senior Building Surveyors inspects, armed with the Landlord’s Schedule of Dilapidations (if already served) and prepares a robust and RICS-compliant “Response” within 56 days, as is required by the Dilapidations Protocol.
• Negotiation: We then engage with the landlord, usually also applying the “Section 18 Diminution in Value” cap via one of our Valuers, to ensure the minimum possible settlement sum is achieved.
• Settlement or Repairs? Usually a landlord’s Schedule is served too close to (or after) lease end, so there is not enough time for the tenant to do much, if any, work. It is thus a claim for damages (the negotiated sum) instead. It is however rarely cost-effective for the tenant to do works, as there will still all but always be a Dilapidations claim served by the landlord, and also because many claimed items do not affect the property's value, or will likely be snuffed out by repurposing or upgrade works.

• Initial Contact: The landlord contacts us for an initial, no-obligation discussion about the issue. If we can help, we will discuss the Tenant’s lease obligations and potential dilapidations liability more thoroughly.
• Formal Instruction: The agreement is signed, the fee structure confirmed, and survey inspection arrangements are made.
• Property Inspection: We arrange to inspect the premises, including using a drone if needed, identify breaches, and assess remedial costs.
• Schedule of Dilapidations: We prepare the Schedule of Dilapidations which is usually then “served” on the tenant by your solicitor who refers to the Dilapidations Protocol and in particular, its requirement for them to have their own Building Surveyor prepare and issue their formal Response within 56 days.
• Negotiation & Settlement: Discussions with the tenant usually lead to a favourable negotiated settlement (including one of our Valuers robustly rebutting any Section 18 Diminution Valuation they have prepared). If costs are disputed, we can arrange formal tendering and if you wish, instruct and project manage the remedial works contract.

We guarantee no tenant fees beyond the minimised initial survey fee until we secure at least 10% saving on the landlord’s claim.

Dilapidations Fees: Fees are based only on the amount we save you beyond 10%*. Or choose an agreed fixed fee – whichever works best for you!

FREE Section 18 (Diminution) Valuation: We include this vital valuation - at no extra charge - so you pay the lowest possible dilapidations amount. Our competitors usually charge £5,000+ for this essential service. Discounted Standard Survey Fees: A complete survey, including drone if required, by a senior chartered building surveyor to prepare and issue a robust rebuttal to the landlord's dilapidations claim at £1,500+ VAT or less (the market norm is usually two to three times this amount).

*Only available to new clients with a single dilapidation claim of more than £50,000. Fees otherwise tailored accordingly.

We take the strain and stress off your hands with complimentary advice and fees based on a discounted percentage of the settlement sum achieved, including:

Free advice on your rights as landlord at law and under the specific lease, particularly on recovery of fees from the tenant*

Survey (including drone if required) and preparation of a comprehensive Schedule of Dilapidations to serve the tenant (usually at a fee fully recoverable from the tenant)

Our fee is then based on a discounted percentage of the sum achieved (or fixed fee/hourly rate, as you prefer). If we tender and/or project manage works, a separate fee basis is agreed.

FREE "Section 18/Diminution in Value" report and advice if, as is typical, the tenant requires you to provide, per The Dilapidations Protocol (this will otherwise cost you an average of £5,000 extra elsewhere)

*Only available to new clients on a single dilapidations claim of more than £50,000. Fees are otherwise tailored accordingly.

The Dilapsolutions team will handle most of the process for you, reducing stress and workload. You’ll need to provide us with all of the relevant paperwork, including your lease. If you are tenant, your landlord (through us) may also request safety certificates for electrical, gas, and fire alarms.

We work on all business premises (retail, industrial, office, leisure, etc.) and specialise in resolving dilapidations issues across all commercial and leisure properties, including listed and conservation areas.

The extensive Dilapsolutions team cover the entire United Kingdom and Republic of Ireland, with chartered surveyors based throughout.

Firstly, the guarantee of securing you the best possible outcome. That is because we are the only dilapidations consultancy that employs and automatically engages BOTH distinct disciplines of chartered surveyor required to achieve that. The Building Surveyor negotiating remedial costs, plus the Valuer to apply (as tenant) or rebut (as landlord) the Section 18 Diminution in Value Cap.

Secondly, there is a guarantee of no fee for tenants beyond the minimum initial survey fee until we secure at least a 10% savings on the landlord’s claim.

We commit fully and equally to the party we are representing, every time, be it a tenant or landlord. Having acted for both tenants and landlords across a wide range of commercial premises, means we know how to rebut what the other side argues.

You will always have a single key contact at Director level, available any time. We guarantee the highest professional standards from chartered surveyors, “Regulated by RICS”, as well as being both chartered arbitrators and RICS Accredited Mediators.

At Dilapsolutions, you uniquely get two chartered surveyors for the price of one! Both a:

• Building surveyor to negotiate costs and
• A valuer to apply section 18/Diminution in Value to guarantee the lowest outcomes for tenants, and both to comply with the Protocol (paras 9.3 & 9.4) and rebut opportunistic Tenant DV’s, for landlords.