A Dilapidations Schedule is a formal legal document served by a landlord on a tenant of a commercial property setting out all alleged breaches of the tenant's obligations under the lease in relation to repair, decoration, reinstatement of alterations, and the yielding up of the premises in the condition required by the lease at the end of the tenancy. The schedule identifies each specific defect or breach, references the clause in the lease that has been breached, describes the physical state of the premises, and specifies the remedy required (either the works to be carried out or the monetary sum representing the cost of those works).

Dilapidations law in England and Wales is primarily governed by the covenants in the lease itself (interpreted by the courts of England and Wales over centuries of common law), supplemented by a number of important statutes. The most significant statutory limitation on a landlord's dilapidations claim is section 18(1) of the Landlord and Tenant Act 1927, which caps the landlord's damages for breach of a repairing covenant at the amount by which the value of the landlord's reversionary interest in the property is diminished by the breach. This cap — commonly known as the 'Section 18 cap' — can substantially reduce the landlord's claim where the diminution in value of the reversion is less than the cost of the scheduled works.

The Leasehold Property (Repairs) Act 1938 provides additional protections for tenants of commercial leases granted for 7 years or more with at least 3 years remaining. It requires the landlord to serve a section 146 notice before bringing an interim dilapidations claim and gives the tenant the right to serve a counter-notice requiring the landlord to seek leave of the court before proceeding.

The RICS Dilapidations Guidance Note (7th edition) and the Pre-Action Protocol for Claims for Damages in Relation to the Physical State of Commercial Property at the Termination of a Tenancy set out best practice for the preparation and service of dilapidations schedules and the conduct of dilapidations disputes. Compliance with the Protocol is expected by the courts of England and Wales and non-compliance may result in adverse costs consequences. Our UK Dilapidations Schedule template is drafted in accordance with these statutory requirements and best practice guidelines.

A Dilapidations Schedule is needed in the context of a commercial lease in England and Wales whenever a landlord believes that a tenant has failed to comply with their repairing, decorating, or reinstatement obligations under the lease. The schedule may be served in two principal circumstances: at or near the end of the lease (a 'terminal' schedule), or during the currency of the lease (an 'interim' schedule).

A terminal schedule of dilapidations is the most common type. It is typically prepared by a RICS-qualified building surveyor on behalf of the landlord shortly before, on, or after the expiry or earlier termination of a commercial lease. The purpose is to document all alleged breaches of the tenant's repairing and decorating obligations as at the date the tenant vacated the premises, to calculate the cost of remedial works, and to present a claim to the tenant for the lesser of the cost of those works or the diminution in the value of the landlord's reversion. Terminal schedules are relevant for all types of commercial lease, including offices, retail units, industrial premises, warehouses, and restaurants.

An interim schedule of dilapidations is served during the lease term, typically where a tenant has neglected the premises over an extended period and the landlord is concerned that the disrepair is worsening and will result in a larger claim at the end of the lease. An interim schedule may also be appropriate where a landlord intends to sell the property and needs the premises to be in proper repair.

Dilapidations claims are often significant in value — particularly for larger commercial premises where extensive repair, decoration, and reinstatement works may be required. The RICS estimates that dilapidations disputes represent a substantial proportion of all commercial landlord and tenant litigation in England and Wales. A well-prepared Dilapidations Schedule is essential for establishing the landlord's claim, demonstrating compliance with the Dilapidations Protocol, and providing the evidential basis for subsequent negotiations or litigation.

A well-prepared Dilapidations Schedule for use in England and Wales should contain several key elements that together establish the landlord's claim clearly and in accordance with the applicable law and best practice.

The identification of the parties, lease, and premises is the starting point. The schedule should clearly identify the landlord, the tenant, the demised premises (as described in the lease), the date of the lease, the term, and the date of expiry or surrender. This information establishes the context of the claim and enables the tenant to check the schedule against the lease.

The repairing covenant is fundamental. The schedule should set out the full text of the tenant's repairing and decorating obligations as stated in the lease. The scope of the tenant's liability depends entirely on the wording of the covenant — whether it is a full repairing obligation, a fair wear and tear exception, an obligation limited by a Schedule of Condition agreed at the start of the lease, or some other formulation.

The schedule items should set out each alleged breach in a systematic format, identifying: the location and description of the defect; the clause in the lease that has been breached; the observed physical state of the relevant part of the premises; the remedy required (whether repair, redecoration, reinstatement, or removal); and the estimated cost. A well-prepared schedule follows a logical order, typically room by room or element by element (structure, roof, external walls, internal walls, floors, ceilings, mechanical and electrical services, and decorations).

The total estimated claim sets out the aggregate cost of all items in the schedule. This is the starting point for the landlord's claim, before any adjustment for the Section 18 diminution cap.

The Section 18 diminution in value assessment is often the most critical and contested element of a terminal dilapidations claim. It requires the landlord to obtain a valuation from a RICS-qualified surveyor of the amount by which the value of the landlord's reversionary interest is diminished by the dilapidations — which may be substantially less than the cost of the scheduled works.

The response and protocol provisions should draw the tenant's attention to the Dilapidations Protocol and the tenant's right (and obligation) to respond to the schedule within 56 days, including by identifying disputed items and commissioning their own surveyor's response.