A terminal schedule of dilapidations arrives, with a figure that can run to six or seven figures, and a short deadline to respond. For many tenants it is the first time they have seen one. The important thing to know is that a landlord's schedule is an opening position, not a bill. Most are negotiable, and many are overstated.

Step 1: Do not ignore it, and do not pay it

Note every date on the schedule and any covering letter. The Dilapidations Protocol (the pre-action protocol for claims relating to the physical state of commercial property at the end of a tenancy) sets timescales for each stage, and a late or missing response weakens your position. Acknowledge receipt promptly, but do not accept liability or agree a figure until the schedule has been checked.

Step 2: Start with the lease, not the schedule

Your liability comes from the lease, not from what the landlord would like the building to look like. Check the repairing covenant, the decorating covenant, the reinstatement and alterations provisions, and whether the lease limits your repair obligation by reference to a schedule of condition taken at the start. If one exists, it can reduce what you owe significantly.

Step 3: Test each item

A surveyor will walk the property against the schedule and ask, item by item:

• Is the work actually required under the lease?
• Is the item a breach at all, or fair wear and tear within your covenant?
• Is the specification reasonable, or does it replace rather than repair?
• Is the cost realistic, or inflated by contractor margins, preliminaries and project management fees?
• Does the claim include works that will be done anyway because the landlord plans to refurbish or redevelop?

Cut edge corrosion, roof coatings and cladding items on industrial buildings are common areas where the specification and cost are overstated.

Step 4: Check the cap on damages

Even where a breach is proved, a landlord cannot always recover the full cost of the works. The law limits damages to the loss in value of the landlord's interest in the building, and in some cases removes the claim altogether. This is covered in our guide to Section 18 and diminution in value.

Step 5: Look for double recovery and loss of rent claims

Landlords sometimes claim both the cost of works and rent for the period the works would take, or claim for items already covered elsewhere in the schedule. Each head of claim should be justified separately.

Step 6: Respond properly and negotiate

A clear, evidenced response, prepared by a surveyor, with each item accepted, rejected or part-accepted and reasons given, is what moves a negotiation. Our guide to the schedule of dilapidations and Scott schedule responses explains the format. Most claims settle through negotiation, and a reasoned position early on usually produces a better outcome than a late, general denial.

When to bring in a surveyor

If the claim is above a few thousand pounds, if the lease is complex, or if the building is large or industrial, independent advice usually pays for itself. Our tenant dilapidations team acts for tenants across the UK, and the sooner we are involved, the more options you keep open.

Frequently asked questions

How long do I have to respond to a dilapidations claim?

The Dilapidations Protocol sets timescales for each stage, generally measured in weeks. Check the dates on the document you received and take advice quickly.

Can a landlord claim for work they will not carry out?

Often yes in principle, but the amount recoverable is limited by the loss in value to the landlord's interest, so a claim for works that will never be done is frequently reduced.

Should I wait for the landlord to serve a claim?

No. Acting before lease end, through a schedule of condition, a pre-termination survey or a break clause review, usually gives the strongest position. See our lease end checklist.

This guide is general information, not legal advice. Where a claim raises legal questions, take advice from a solicitor alongside your surveyor.

Contact Bemerton Consulting to discuss a dilapidations claim you have received.