25th November 2025
Understanding dilapidations: How to navigate and avoid unexpected costs at the end of your lease
Building Consultancy • Dilapidations
What are Dilapidations and why do they matter?
When you sign a commercial lease, you’re not just agreeing to pay rent. You’re also committing to maintain the property – and return it in a specified condition when the lease ends. These obligations are called dilapidations.
If you ignore them, you could face:
- Unexpected repair bills for issues you didn’t anticipate
- Legal disputes with your landlord over reinstatement
- Budget shocks that derail your exit strategy
Landlords rely on dilapidations to protect their investment and tenants need to understand them to avoid financial surprises.
Commercial leases used to last 20-25 years. Today, shorter leases (often 10 years with a break at year 5) are common, which means as a result, dilapidations claims arise more frequently. It’s therefore now more important than ever for both landlords and tenants to understand the process and the potentials costs involved
who is responsible for dilapidations?
- Tenants: Usually responsible for repairs and reinstating alternations made during the lease
- Landlords: Must issue notices and provide evidence if they expect reinstatement
The role of a schedule of condition
A Schedule of Condition is a detailed record of the property’s state at the start of the lease. It includes:
- Written descriptions and photographs of roofs, walls, fixtures and external areas
- Evidence of the original layout (important if reinstatement is required)
It matters because without it, tenants maybe liable for pre-existing defects. It also reduces disputes by clearly defining responsibilities.
Tip: Engage a qualified Building Surveyor before signing the lease to prepare this schedule.
Watch: How to Navigate Dilapidations for Landlord and Tenant
top tips to avoid dilapidations pitfalls
- Get a thorough Schedule of Condition before signing the lease. Don’t settle for a limited inspection by engaging a Building surveyor at pre-lease stage to fully understand the condition of the property
- Plan your exit strategy in advance by engaging with your landlord early, allowing enough time to complete any works. Waiting until the last minute limits Landlords’ options and puts them in the driving seat
- Check reinstatement clauses. Landlords often need to give tenants adequate notice to reinstate the property in the form of a reinstatement notice. If not received within the agreed timeframe, the landlord may risk losing the claim
- Provide full documentation (leases, deed of variations, licences to alter or a Schedule of Condition) to your Building Surveyor for accurate assessments
checklist for landlords and tenants
✅Understand your obligations before signing
✅Document the property’s condition thoroughly
✅Budget for potential repairs
✅Communicate early about exit plans.
Dilapidations are a financial reality. Whether you’re a landlord protecting your asset or a tenant planning your liabilities, early action and clear documentation are key to avoiding costly surprises.
