Dilapidations are one of the most misunderstood aspects of commercial leases, with persistent myths often shaping tenant behaviour far more than the actual legal position. Misconceptions about when dilapidations apply, what works are truly required, and whether large claims are inevitable can lead tenants to either ignore their obligations or overspend unnecessarily at lease end. In this article, we tackle some of the most common dilapidations myths head-on, separating assumption from reality so tenants can approach lease compliance, maintenance, and exit strategy with clarity and confidence.
Speak to a member of the teamThere are many misconceptions around commercial lease dilapidations. Believing these myths can lead to costly mistakes for tenants. Let’s debunk some of the most common dilapidations myths and clarify the reality:
Myth 1: “Dilapidations only apply at the end of a lease.”
Truth: While dilapidations claims are typically made at lease end (terminal dilapidations), the obligations to repair and maintain exist throughout the lease. Dilapidations is really an ongoing process during the lease, not just at the end. Landlords can enforce repairing covenants during the term via interim schedules or even forfeiture for severe disrepair. More importantly, if you wait until the end to think about dilapidations, you risk letting problems snowball. Regular maintenance during the lease greatly reduces your liability at the end. So, don’t assume you can ignore repairs until month 119 of a 10-year lease you are contractually obligated to keep the property in good repair continuously. Addressing issues as they arise also prevents a scenario where dilapidations at lease end are so extensive they threaten your business’s finances or allow the landlord to claim insolvency-inducing sums.
In short, yes, final claims happen at lease end, but dilapidations should be managed all along. Thinking it “only counts at the end” is a recipe for a large claim that could have been mitigated.
Myth 2: “If I repaint and clean before I leave, I can avoid any dilapidations claim.”
Truth: Fulfilling redecoration obligations is wise (and often required), but simply redecorating at the end will not immunize you from all dilapidations claims if there are other breaches. Tenants sometimes think a fresh coat of paint hides all sins. While redecoration is important, dilapidations encompass much more than paint and cleanliness. For example, repainting walls won’t fix a leaky roof or a worn-out HVAC system that wasn’t maintained. Nor will it remove unauthorized alterations or address structural cracks.
Landlords will inspect for compliance with all covenants including repair of building elements, replacement of damaged items, servicing of plant and machinery, and reinstatement of any alterations. If you only budget for a quick repaint, you may be blindsided by claims for things like rotten window frames, outdated electrical certifications, or that mezzanine floor you installed and left in place.
Moreover, many leases require you to redecorate and repair. Both must be done. Redecoration itself is often a last-year obligation, but not a substitute for other duties. As a scenario, suppose a tenant diligently repaints the interior but has throughout the lease neglected a broken gutter, causing water damage to plaster. They will still face a claim to hack off and re-plaster the water-damaged sections (paint alone wouldn’t suffice).
To illustrate: One case had a tenant spend on nice improvements and finishes, thinking this meant no dilapidations risk, but “lease requires them to strip everything back to bare concrete and reinstate original fixtures”. In other words, you could have painted beautifully, but if the lease says return it to original shell, that paint (or fancy fit-out) might need to be removed! Good appearance doesn’t equal compliance.
Reality: Redecorating before handover is beneficial and often mandatory it may reduce the claim but it doesn’t cover things like repairs to fixtures or removal of alterations. Don’t let a coat of paint give you a false sense of security about dilapidations.
Myth 3: “All tenants will automatically face a huge dilapidations bill when they vacate.”
Truth: Not necessarily. It’s true that dilapidations can be one of the largest exit costs for commercial tenants, but it’s not “automatic” or unavoidable that you’ll owe a fortune. The outcome depends on how well you maintained the property, the lease terms you negotiated, and what the landlord’s plans are.
Firstly, if a tenant fully complies with their lease meaning they repair issues promptly, redecorate as required, and reinstate alterations or get landlord agreement to leave them – then the dilapidations claim could be minimal or even zero. Many tenants do exit with little more than a minor touch-up or none at all, especially if the space is left in good nick.
Secondly, if you negotiated protective clauses (e.g. a schedule of condition, caps on certain liabilities, or exclusion of fair wear and tear for decorations), your liability might be significantly limited. For example, with a schedule of condition, you’re not responsible for pre-existing poor conditions thus potentially owing very little if you didn’t make things worse.
Additionally, landlords cannot profit from dilapidations. The law (Section 18 again) prevents them from claiming more than the actual loss. “Landlords are advised that they should not attempt to profit from this type of claim. Any settlement must only reflect the actual cost incurred as a result of the tenant’s failure… no punitive damages.”. This means if the landlord’s claim looks exorbitant, the tenant can challenge it. The claim should represent actual remedial costs or value diminution. Often this legal cap reduces “huge” claims to more reasonable levels. Also, if the landlord is planning to refurbish or redevelop, their actual loss from your breaches may be small (so your pay out should be small).
It’s a myth that every tenant gets slammed with an enormous bill; that tends to make the news, but plenty of tenancies end with modest claims or negotiated settlements. Of course, tenants who ignore obligations will get a big bill – but that’s avoidable with proper action.
Debunk summary: With proactive maintenance, smart lease negotiation, and knowledgeable negotiation of any claim, tenants can and do escape large dilapidation liabilities. Don’t resign yourself to “it’s always six figures”. Each case varies – in some, the property might be re-let in the same condition, meaning little claim; or basic compliance may leave the landlord with nothing major to do.
Additional Myth: “Dilapidations don’t apply if the landlord is demolishing or redeveloping the property.”
Truth: There’s a half-truth here. If a landlord truly is going to demolish or do a deep redevelopment, Section 18’s second limb says they cannot claim for repairs that would be rendered useless by that demolition or rebuild. For instance, if the building will be gutted, why should the tenant pay to repaint or recarpet? In such cases, the tenant often has a strong defence to those parts of a claim. However, this doesn’t mean no dilapidations liability. Many redevelopment plans still retain parts of the structure e.g., the shell or certain elements and any disrepair to those could still diminish value or cause cost to the landlord in the interim. As an expert explains, even if significant changes are intended, “if the building is in disrepair, it’s likely the landlord will have suffered some loss…works will have to be done if the outgoing tenant hasn’t done them.”. In practice, tenants should not assume a rumoured redevelopment equals a free pass. It can greatly reduce the scope of a claim (and should be used in negotiation), but unless the entire site is being levelled immediately, expect the landlord to seek some damages for the condition left.
By dispelling these myths, tenants can approach dilapidations with clear eyes. Key takeaways: Dilapidations is an ongoing responsibility (not just end), doing only superficial fixes won’t satisfy all obligations, and hefty claims can often be mitigated or avoided. Always refer back to your lease and get professional advice facts, not myths, should drive your end-of-lease strategy.
Ultimately, the common thread running through all of these myths is that dilapidations are driven by the specific wording of your lease, not assumptions or market folklore. A dilapidations specialist can cut through that noise by reviewing your lease in detail, identifying which obligations genuinely apply, and advising how to approach key items such as repair standards, redecoration, and reinstatement of alterations in a proportionate and cost-effective way. Taking professional advice early helps tenants avoid both under-compliance (which leads to inflated claims) and over-compliance (which leads to unnecessary spend), and places you in a far stronger position to challenge overreaching demands or negotiate a sensible settlement. In practice, informed strategy—not last-minute guesswork—is what most often separates manageable dilapidations outcomes from costly surprises.
Speak to our specialists todayAbout Fourth Wall Building Consultancy
Fourth Wall Building Consultancy specialises in UK commercial property dilapidations, offering expert surveying and consultancy services tailored to landlords and tenants. We offer:
- Highly Experienced Chartered Surveyors with a proven track record in dilapidations claims.
- Transparent Pricing Models to help clients budget effectively.
- Early Engagement Approach, minimizing costly end-of-lease surprises.
- Comprehensive Reporting using the latest digital tools for clarity and precision.
- Dispute Resolution Support to avoid expensive litigation.
Related Services
- Dilapidations surveys and schedules
- Pre-Lease compliance and condition assessments
- Building condition reports and maintenance planning
- Dispute negotiation and expert witness support
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Frequently Asked Questions
Dilapidations are breaches of a tenant’s lease obligations relating to repair, maintenance, decoration, and reinstatement of alterations. A landlord may claim damages to cover the reasonable cost of remedying those breaches, usually at lease end but sometimes during the term. Dilapidations are governed primarily by the lease wording and statutory controls such as Section 18 of the Landlord and Tenant Act 1927.
No. While most dilapidations claims are made at lease expiry, repair and maintenance obligations apply throughout the lease term. Landlords can enforce these obligations during the lease through interim schedules, notices, or where breaches are serious by forfeiture. Waiting until lease end to address disrepair often increases liability.
Usually not. Redecoration is often a specific lease requirement, but it does not replace obligations to repair defects, maintain building elements, or reinstate alterations. A fresh coat of paint may improve appearance, but it will not resolve underlying breaches such as damaged floors, defective services, or unauthorised alterations.
No. Large claims are not inevitable. Where tenants maintain the property properly, comply with lease obligations, and manage alterations correctly, dilapidations claims can be modest or avoided entirely. Outcomes depend on the lease terms, the condition of the property, and the landlord’s actual loss not on assumptions or market horror stories.
No. Landlords are not entitled to profit from dilapidations. Claims must reflect the reasonable cost of remedial works or the actual diminution in value caused by the tenant’s breaches. Section 18 of the Landlord and Tenant Act 1927 limits damages for disrepair to the landlord’s real loss and prevents inflated or punitive claims.
Not always in full. If repairs would be rendered valueless by imminent redevelopment or demolition, Section 18 may limit or extinguish the landlord’s claim for those items. However, this does not mean dilapidations automatically disappear landlords may still claim for elements that affect value or incur cost prior to redevelopment. Each case turns on evidence, not assumption.
Often, yes. Most leases allow landlords to require reinstatement of tenant alterations unless expressly waived. Even improvements can need to be removed if the lease or licence to alter says so. Importantly, reinstatement costs are not capped by Section 18, making alterations one of the highest-risk areas of dilapidations liability.
Yes. Dilapidations claims are frequently negotiated. Tenants can challenge items that exceed lease obligations, represent betterment, or do not reflect the landlord’s actual loss. Early engagement, proper evidence, and professional advice significantly improve the prospects of reducing or settling a claim on sensible terms.
Tenants should:
understand repair and reinstatement obligations from the outset;
maintain the property throughout the lease;
manage alterations carefully and document landlord consents;
plan for lease expiry well in advance; and
seek professional advice before carrying out end-of-term works or responding to claims.
Most costly dilapidations outcomes arise from misunderstanding, delay, or assumption rather than unavoidable liability.
Yes. A dilapidations specialist can interpret lease wording, identify genuine risks, advise on proportional compliance, and help challenge overreaching claims. Professional advice ensures decisions are based on legal and valuation reality rather than myths, often saving tenants substantial time and cost.
