It is an unfortunate fact of life that the condition of a property deteriorates as time passes. Who is responsible for repairing and maintaining a property is a significant issue for commercial landlords and tenants and can often give rise to a dispute. This is a complex area of law and it is recommended that both landlords and tenants seek advice from a surveyor and a specialist property litigation solicitor at an early stage to minimise risk.

What are dilapidations?

Most, if not all, commercial leases contain clauses setting out which party is responsible for repairing, redecorating, reinstating, maintaining, cleaning and carrying out works to comply with statutory covenants. Dilapidations are the difference in the actual condition of a property in comparison with the condition that the property should be in if the tenant has complied with its obligations.

A well drafted commercial lease will set out the tenant’s obligations in a clear fashion. It is important that the parties understand the tenant’s obligations as it is not always the case that the tenant simply needs to return the property to the landlord in the condition it was in at the beginning of the lease.

What action can a landlord take if there are dilapidations?

It is open to a landlord to take action, both during the term of the lease and at expiry, if the tenant has not complied with their obligations in relation to the required condition of the property and there are dilapidations.

Remedies at lease expiry

Where the tenant has not carried out those works necessary to remedy any dilapidations by the time the lease comes to an end or, alternatively, agreed a financial settlement then the landlord will expect to be reimbursed for the costs of the works.

If the tenant does not pay or disputes some or all of the charges, the landlord will be forced to take legal action to recover the sums involved by claiming damages. However, before this stage is reached it is important that the landlord ensures compliance with the Dilapidations Protocol.

What is the Dilapidations Protocol?

The Dilapidations Protocol gives the parties a framework to follow, which provides for the early exchange of information about the dispute to encourage settlement, without the need for court proceedings. Even if litigation cannot be avoided, compliance with the protocol will, in most cases, help to reduce the litigation costs.

A schedule of dilapidations is the key ingredient of the protocol. It should be prepared by the landlord in a prescribed form. In reality, the landlord in most cases will appoint a surveyor to do this. The schedule should set out the alleged breaches by the tenant, the works required to remedy the breaches and an estimate of the associated cost. The protocol suggests that the schedule should be served by no later than two months after the lease end and sets out a recommended timetable for the parties to follow thereafter.

The protocol makes it clear that proceeding to court should be a last resort and a court is likely to look closely for evidence of compliance with the provisions of the protocol to see if proceedings could have been avoided. A landlord’s failure to comply with the protocol can result in cost penalties unless the landlord can persuade the court that there were cogent reasons for non-compliance.

Quantification of the landlord’s claim for damages

The level of damages that the landlord can claim against the tenant for dilapidations is impacted by section 18 of the Landlord and Tenant Act 1927.

Section 18 limits the landlord’s claim for damages for breach of the repair covenant in the following ways:

damages are limited to the diminution in value of the property, i.e. to the amount equivalent to the reduction in the value of the property due to the disrepair; no claim will succeed if it can be shown that shortly after the end of the lease term, the property is to be demolished or altered to the extent that the repairs will be of no value.

The principle is that landlords cannot expect to make a profit from a dilapidations’ claim.

Dilapidations’ claims may also arise from the breach of an obligation to redecorate, reinstate, clean or carry out works to comply with statutory covenants. The section 18 restrictions do not apply to a claim for damages in respect of those breaches.

A cleverly drafted lease may also allow the landlord to circumvent Section 18. For example, there may be a clause obligating the tenant to pay the landlord a sum equivalent to the rent for the period that it would take the landlord to carry out necessary repairs to the property where the tenant has breached the repairing obligations.

Remedies during the term

The landlord can also take action in respect of dilapidations during the lease term. This is
important as it enables landlords to minimise exposure to the risk of a tenant becoming

The options available to the landlords are as follows:

  • forfeiture
  • claim damages
  • entry and repair under a ‘Jervis v Harris’ clause
  • specific performance


It is open to the landlord to forfeit the lease in the normal way (i.e. by serving a section 146 notice) if the lease contains a forfeiture clause exercisable if the tenant fails to comply with its obligations in relation to the condition of the property.

The Leasehold Property (Repairs) Act 1938 will apply where the landlord serves notice based on the tenant’s breach of an obligation to repair if the lease is for a fixed term of 7 years or more, with 3 or more years remaining (unless the lease is a tenancy to which the Agricultural Holdings Act 1986 applies or a farm business tenancy).

This allows the tenant to serve a counter-notice within 28 days preventing the landlord from taking any legal proceedings in respect the tenant’s breach or claim damages without the court’s permission. There are various criteria that the landlord must fulfil to obtain permission, one being demonstrating to the court that there has been a substantial decrease in the value of the property.

Claiming damages

It can be difficult for a landlord to claim damages for disrepair during the term of a lease. The Leasehold Property (Repairs) Act 1938 may apply, which will allow the tenant to serve a counter-notice to prevent any further action without the court’s permission.

Damages will be calculated with reference to various factors, including the unexpired term of the lease, the valuation of the reversion subject to the lease, whether the tenant has security of tenure under the Landlord and Tenant Act 1954, any charges and whether the landlord has the ability/means to carry out the works. Crucially, Section 18 of the Landlord and Tenant Act 1927 also applies so that damages are limited to the diminution in value of the property.

Entry and repair under a “Jervis v Harris” clause

A well drafted lease should include a “Jervis v Harris” clause allowing the landlord to serve notice on the tenant requiring the tenant to carry out repairs within a specified period of time and, in the absence of the tenant complying, entitling the landlord to enter the property, carry out the works and claim the associated cost from the tenant.

Specific Performance

It is open to the landlord to apply to the court for an order requiring the tenant to carry out the works to ensure compliance with the relevant lease obligations (i.e. seek an injunction). A court is reluctant to make such an order, and the landlord would need to
demonstrate that other options are inappropriate and there is a compelling reason for the works to be done.

This is a good option for a landlord where urgent works are required and the tenant is refusing to co-operate.

Contact Luscombe Gray

The law and practice relating to dilapidations is complex. This is a brief overview of what can be a tricky area for landlords and tenants to navigate their way through. Luscombe Gray has many years of experience in acting for landlords and tenants in routine and complex dilapidations’ disputes. If you are a landlord or a tenant and require advice or assistance on anything raised in this article or indeed on any property dispute, call us now on 01423 637 699 or email and one of our specialists will get back to you straight away.