Schedule of dilapidations

Dilapidations are breaches of leases due to the condition of the property being leased, either during or at the end of the lease period. This may result from mistreatment of the property or poor or absent maintenance or repairs that are required by the lease. Further work may also be required at the end of a lease to reinstate alterations that have been made to the property by the tenant.

If the required works are not carried out, the landlord may issue a schedule of dilapidations, or a notice to reinstate.

A schedule of dilapidations will generally be prepared by the landlord or their surveyor, scheduling outstanding reinstatement, repair, decorations and other legal compliance items. It may also identify the clauses of the lease that may have been breached, suggest appropriate remedial works and, in some cases, the estimated cost of those works. If the lease has expired, these costs may include loss of rent during the period when repairs are being carried out.

There are three types of schedule of dilapidations:

• Interim schedule of dilapidations, issued during the course of the lease.
• Terminal schedule of dilapidations, issued during the last three years to 18 months of the lease.
• Final schedule of dilapidations issued after expiry of the lease.

Generally it is the terminal schedule or final schedule that set out proposed remedial works and costs.

The landlord may wish to issue an interim schedule of dilapidations during the course of the lease to protect the value of their property and ensure that proper maintenance is being carried out. An interim schedule will generally be less detailed than a terminal schedule or final schedule, but it can nonetheless help avert the accumulation of serious neglect which might leave the tenant facing the prospect of unexpected, or unaffordable works, or having insufficient time to carry out the works before the end of the lease. This is not in the interests of the tenant or the landlord who may then face protracted negotiations or dispute, followed by higher repair costs for works which may prevent the property from being re-leased.

The lease may include clauses permitting the landlord to enter the property to undertake remedial works themselves under specific circumstances if the tenant is in breach of their obligations under the lease. The landlord might also seek forfeiture of the lease to recover possession of the property.

If dilapidations works are not carried out by the end of the lease, the landlord may claim damages from the tenant (a terminal dilapidations claim). This may take the form of a ‘quantified demand’ setting out details of the landlord’s losses as a result of the dilapidations, this may include loss of rent due to repairs being carried out.

The tenant should properly assess the validity of the schedule of dilapidations against their obligations set out in the lease and should also verify the costs if these have been quoted. The tenant may benefit from the services of a surveyor to help them do this.

A ‘Pre-Action Protocol for Claims for Damages in Relation to the Physical State of Commercial Property at Termination of a Tenancy’ (the 'Dilapidations Protocol') is available from the Ministry of Justice. This describes the conduct the court expects the parties to follow before commencing proceedings, setting out a process and timetable for the exchange of information, and establishing standards for the content and quality of schedules of dilapidations and quantified demands.

There is a separate Pre-Action Protocol for Housing Disrepair cases.

NB Dilapidations in England And Wales, 7th Edition, published on 31 August 2016 by the Royal Institution of Chartered Surveyors (RICS), suggests a schedule of dilapidations is:

[edit] Related articles on Designing Buildings

• Alternative dispute resolution.
• Betterment.
• Break clauses in leases.
• Dilapidations.
• Dilapidations protocol.
• Lease Negotiations - Tenants Checklist.
• Licence for Alterations for Apartment.
• Payment for dilapidations.
• Quantified demand.
• Rent-free period.
• Rent in administration.
• Rent review.
• Schedule.
• Schedule of condition.
• Scott schedule.
• Sample retail lease.
• Supersession.

[edit] External references

• RICS, A clear, impartial guide to Dilapidations For use in England and Wales. November 2013
• Ministry of Justice, Pre-Action Protocol for Claims for Damages in Relation to the Physical State of Commercial Property at Termination of a Tenancy.
• Ministry of Justice, Pre-Action Protocol for Housing Disrepair.

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