Dilapidations explained: a guide for office tenants

In Brief

• Dilapidations is the landlord’s claim for the cost of putting right breaches of your lease’s repair, decoration and reinstatement covenants when the lease ends.
• For leases in England and Wales, damages for disrepair are capped at the fall in value of the landlord’s interest under section 18(1) of the Landlord and Tenant Act 1927.
• The Dilapidations Protocol sets the timetable: the landlord’s schedule usually arrives within 56 days of the lease ending, and you usually have 56 days to respond.
• Get an assessment 12 to 18 months before your break or expiry date, while you can still choose between doing the works and negotiating a cash settlement.

Every office lease ends with a conversation about condition. If you have not planned for it, that conversation tends to arrive as a schedule of dilapidations and a demand for money, often weeks after you have moved out and spent your budget on the new office.

This guide explains how dilapidations work for office tenants in England and Wales, what limits a landlord’s claim, and how to plan the end of a lease so the bill is known, budgeted and, where possible, reduced. It is general guidance rather than legal advice. Your lease wording decides your obligations, so involve a building surveyor and a property solicitor early.

What dilapidations means

The RICS describes dilapidations as breaches of lease covenants that relate to the condition of a property, during or at the end of a tenancy (RICS consumer guide). In practice, a claim usually covers three things.

Repair covers anything your repairing covenant requires that is not in the required condition: damaged ceiling tiles, worn carpets, faulty fittings and, depending on the lease, building services. Reinstatement covers the removal of your alterations, such as partitions, meeting rooms, kitchens and raised floor changes, where the lease or a licence for alterations says they must come out. Redecoration covers the decorating covenant, which often requires redecoration in the last year of the term.

The landlord can also claim related losses where it can prove them, such as loss of rent while works are carried out, service charge for that period and professional fees.

Interim and terminal schedules

An interim schedule is served during the lease, usually well before the end, and concentrates on repairs that would stop the building deteriorating. Many leases include a clause allowing the landlord to enter, carry out the works and recover the cost as a debt if you do not act.

A terminal schedule is served near or after the end of the lease and covers repair, reinstatement and redecoration. Surveyors commonly serve it in the last 18 months of the term, and a schedule served before the lease ends must be confirmed or reissued once it has ended (Dilapidations Protocol).

The legal limit on what a landlord can claim

Section 18(1) of the Landlord and Tenant Act 1927 does two things for tenants.

First, damages for breach of a repairing covenant cannot exceed the amount by which the value of the landlord’s interest has been reduced. This is the diminution in value cap. If the landlord plans to refurbish the floor anyway, the disrepair may make little difference to its value, and the claim may be worth far less than the cost of the works listed in the schedule.

Second, no damages are recoverable for failing to leave the premises in repair if the building is to be demolished, or structurally altered in a way that would make the repairs valueless, shortly after the lease ends.

A September 2026 High Court decision, Craigard (Dartford) Ltd v Westbury Homes, applied these rules to an office building. Where air conditioning could be either repaired or replaced, damages followed the cheaper repair option, and the landlord’s plans for sustainability upgrades did not increase the tenant’s liability. The court also held that the section 18(1) cap applies to the damages as a whole, including lost rent.

The cap is generally treated as applying to repair claims. Whether it limits a reinstatement claim depends on how the obligation is worded, so ask your solicitor how it applies to your lease.

How the Dilapidations Protocol works

Claims at the end of a commercial lease in England and Wales follow the Pre-Action Protocol for Claims for Damages in relation to the Physical State of Commercial Property at Termination of a Tenancy. Its main steps are these.

The landlord sends its schedule within a reasonable time, generally within 56 days after the lease ends. It also sends a quantified demand setting out the sums claimed. The schedule must be endorsed to confirm the works are reasonably required and the costs are reasonable.

The tenant’s response is usually due within 56 days of the demand, and the parties should generally meet within 28 days of the response. If the landlord does not intend to carry out the works, it should generally provide a formal valuation of the diminution in value.

The Protocol treats court proceedings as a last resort, and how each side follows it can affect who pays costs if the claim does go to court.

Do the works or pay a settlement?

You have two broad routes. The right one depends on cost, time and what the landlord intends to do with the space.

Carrying out the works before you leave

Doing the works yourself keeps you in control of scope, cost and quality. It also limits the landlord’s ability to claim loss of rent for a works period after the lease ends. The risk is programme: works must be finished before your break or expiry date, which can clash with your move and with a break clause condition requiring vacant possession.

Negotiating a cash settlement

A cash settlement avoids works in your final weeks and can be lower than the cost of the works, especially where the landlord plans a full refurbishment and the section 18(1) cap bites. You need good evidence to negotiate well: your own schedule, costings from a contractor who prices this kind of work, and a valuation where diminution is in dispute.

Many tenants use a mix: they reinstate the items that are cheap to strip out and settle the rest in cash. If you are surrendering a lease early, dilapidations are often settled as a fixed sum in the surrender deed.

Reinstatement and your fit-out

Reinstatement is where office tenants are most often caught out. The obligation to remove your alterations usually comes from the lease or from the licence for alterations you signed before your fit-out. Some leases require reinstatement automatically. Others only require it if the landlord serves notice, often by a fixed date before the lease ends, and that deadline is generally applied strictly (Ashfords).

Before you sign a licence for a new fit-out, it is worth agreeing which elements can stay at the end of the term. A well-designed meeting suite or kitchen can be an asset to the next occupier, and a landlord may accept it in place of reinstatement. Our guide to Cat A, Cat B and Cat A+ fit-outs explains which elements usually belong to the landlord’s specification and which are yours.

A timeline for the end of your lease

18 months out: find the lease, every licence for alterations and any side letters. Note your repair, decoration and reinstatement covenants and any notice deadlines. This is also the time to decide whether you are likely to stay or move, which changes how you approach dilapidations. Our guide to staying versus relocating covers that decision.

12 to 18 months out: commission a dilapidations assessment from a building surveyor so the liability goes into your budget. Surveyors in England and Wales work to the RICS professional standard Dilapidations in England and Wales (7th edition).

6 to 12 months out: decide on works or settlement, and if you are moving, line up the timing of strip-out with your move. Our office relocation checklist sets out the wider move plan.

Final three months: complete any works, record the condition of every room with dated photographs and video, and hand back the keys with the space empty.

After the lease ends: expect the schedule and quantified demand within about 56 days, and respond within the Protocol timetable.

How K2 can help

K2 has been fitting out and refurbishing London offices for over 20 years, so we see dilapidations from both sides: as the contractor stripping out old fit-outs and as the team designing new ones. We can price reinstatement works so you know what a schedule is really worth, and carry out strip-out and making good alongside your office move.

If you are staying, the conversation changes. A lease renewal can be a chance to agree a refurbishment with your landlord instead of paying for works that make no difference to how you use the space. Request a callback and we can talk through your lease dates and options.

Frequently asked questions

When should a tenant start planning for dilapidations?

Around 18 months before your break or expiry date. That gives time for an assessment, a decision on works or settlement, and works that finish before the lease ends.

Can a landlord claim more than the fall in the value of the property?

Not for breaches of a repairing covenant. Section 18(1) of the Landlord and Tenant Act 1927 caps those damages at the reduction in value of the landlord’s interest.

Do I have to remove my fit-out at the end of the lease?

Only if your lease or licence for alterations requires it. Some leases require reinstatement automatically and others only if the landlord serves notice by a set date, so check the wording.

How long does a landlord have to send a dilapidations schedule?

Under the Dilapidations Protocol, generally within 56 days after the lease ends. The tenant’s response is usually due within 56 days of the landlord’s quantified demand.