The schedule of dilapidations is the biggest single cost a commercial tenant faces at lease exit outside rent itself. This guide explains how schedules are built, how to review them critically, what the Pre-action Protocol actually requires, and how to settle quickly and compliantly.
Dilapidations are the tenant's lease-end obligation to reinstate the demised premises to the condition required by the lease — typically landlord CAT A standard at original handover. The obligation sits in one or more clauses of the lease (the repair clause, the decorative clause, the yielding-up clause) and is valued by the landlord's surveyor into a schedule of dilapidations.
Schedules are almost universally over-stated at first issue. Landlord surveyors are incentivised to include every arguable item; tenants routinely accept this without challenge and settle at 70–90% of the schedule figure. Well-advised tenants settle at 40–65%.
Most London commercial leases see a schedule served 6–18 months before lease expiry (interim schedule) or immediately after (terminal schedule). The schedule is a line-item document in Scott schedule format: four columns — tenant's items, tenant's comments, landlord's response, and surveyor's determination.
Treat the schedule as an opening position, not a final bill.
Commission an independent dilapidations surveyor — not the same practice as your lease broker. Schedule review within 10 working days. Typical review fee £3,000–£8,000; the savings run into six figures. Our sister practice Hampstead Chartered Surveyors handles this on an agreed-fee basis.
Respond line by line. Three defences apply to most items: (1) the work was not the tenant's obligation under the lease, (2) fair wear and tear exempts it, (3) the landlord's loss (section 18(1) Landlord and Tenant Act 1927) is less than the cost of remedy.
Price the items you accept as tenant liability. A contractor priced scope almost always prices 20–40% under the landlord surveyor's costed schedule. Price then becomes a negotiation anchor.
The Landlord and Tenant Act 1927 caps dilapidations damages at the diminution in value of the landlord's reversion. If the landlord is redeveloping the building, or letting as CAT A plus at lease end, the landlord's actual loss may be nil — regardless of the repair schedule.
A section 18(1) valuation from a chartered surveyor is the tenant's most powerful negotiating position. Commission one if the building is due for substantial refurbishment or redevelopment.
The Pre-Action Protocol (Ministry of Justice, 2012) sets the conduct expected before litigation. Both parties must exchange schedules, responses, and a Scott schedule. The Protocol compliance test is robust — non-compliant parties face cost penalties if the matter reaches court.
Core Protocol documents:
If you can complete the reinstatement works before lease expiry, the landlord's damages claim is extinguished to the extent the works resolve each item. This is the tenant's remedy route, and it's often the cheapest option.
Practical steps:
Get written confirmation of what "compliant reinstatement" looks like. Joint inspection before works begin.
Commercial dilapidations contractor can mobilise within 5 working days. A typical 5,000 sqft reinstatement is 2–4 weeks.
Landlord surveyor inspects and signs off. Photographic and certification pack provided — this is the Pre-action Protocol evidence.
For London commercial office space, typical reinstatement costs per sqft:
Our Office Dilapidations team handles Scott schedule review (via sister practice), priced Scott response, and reinstatement delivery on a fast-track basis. Mobilisation within 5 working days of instruction; joint inspection handover on completion.
Area-specific pages: City of London, Canary Wharf, Westminster & Victoria, Holborn.
At lease commencement. The schedule of condition at inception (often omitted in the rush to heads of terms) is the single best defence against over-stated schedules at exit. Failing that, 18 months before exit is the minimum window to commission review and plan remedial works.
Yes — 30–50% reductions are routine with a chartered-surveyor-led response. Section 18(1) valuation can take the settlement to nil if the landlord is redeveloping.
The landlord's position becomes the default. Settlement at 90–100% of the schedule figure is typical. This is the most expensive outcome for the tenant.
Yes — the dilapidations claim sits in the landlord's hands indefinitely (subject to limitation periods). Settlement negotiations routinely run 3–12 months post-expiry.
The tenant instructs and pays their own. Fees are recoverable from the landlord only in limited costs-following-the-event scenarios at court — plan to bear them.
Measured survey and fixed-price quote within 10 working days.