Dilapidation Property Occupier FAQs

Is there a difference between Dilapidations and Reinstatement?

Yes – dilapidations are repair works to the property which have not been undertaken by a tenant in contravention to the repairing clause in the lease. These can be limited by section 18 of the Landlord & Tenant Act 1927.

Reinstatement are works involving the removal and making good of alterations carried out on the premises by the tenant under either the “alterations” clause in the lease or “Licence to Alter” deed. These are not limited by section 18 of the Landlord & Tenant Act 1927 and it is important to properly understand the provisions of the lease to determine whether the landlord is required to follow specific procedures to validate a claim or to serve notices etc on time prior to the end of the lease.

When do I prepare for Dilapidations?

It is important to be prepared. Seek advice six to nine months before the end of the lease

As tenant, for tax and balance sheet purposes it may be necessary to seek an estimate of potential dilapidations liability three to four years before the end of the lease. We are happy to provide this estimate at no cost.

Otherwise, it may be cheaper to plan to undertake the dilapidation works than pay a settlement figure to the landlord. So make sure you have planned sufficient time to do this.

Is Dilapidations always payable?

No. The dilapidations liability can be limited by section 18 of the Landlord & Tenant Act 1927 to the lower of :

the cost of undertaking the dilapidation repair works and
the diminution of the landlord’s reversion due to the dilapidation works having not been undertaken.
The section 18 valuation can give valuable protection to the tenant. This is why it is important to have a dilapidations negotiator that has both valuation and property market expertise.

In some instances there may be express provisions (agreed at the outset) which allow the tenant to vacate free of any dilapidations cost.

What is the Dilapidations protocol?

Guidance to parties that the courts strongly encourage parties to follow during a dilapidations dispute to limit the costs and time incurred.