Dilapidations Terminology

Break Clause – specific clause within a lease, which allows a tenant to give notice to terminate the lease before full term. This may contain onerous provisions such as material compliance or giving vacant possession.

Contract Administration – when a tenant opts to undertake some or all of the dilapidation works in order to mitigate a landlord claim, or prevent further deterioration to the space/property.

Dilapidations Assessment – itemised costed schedule for the lease end repair liability. This is useful if considering breaking a lease, reviewing stay or go options, or making account provisions for dilapidations.

Interim Dilapidations Schedule (during lease) – formal document prepared by a landlord listing items of lease liability which a tenant has purportedly failed to undertake during the lease term.

Planned Preventative Maintenance (PPM) Strategy – itemised schedule of essential repairs likely needed over a period of 5-10 years and with cost estimates assigned to each year. The essential repair work is subsequently implemented and helps to mitigate end of term dilapidation costs, by ensuring the property is continuously maintained. It is referred to as planned preventative maintenance, as planning for and early detection of potential issues reduces costs and disruption.

Quantified Demand – usually attached to a Terminal Dilapidations Schedule and issued after a lease ends. This sets out the full loss arising from a tenant’s alleged breaches.

Schedule of Condition – a record of the condition of the space/property occupied. The schedule consists of descriptive text and supporting photographs. It is usually prepared prior to lease commencement and used to limit the repairing liability at lease end. It must be referred to in the space/property lease, so that it may be used as evidence if/when defending a dilapidations claim.

Scott Schedule – extended version of the Terminal Dilapidations Schedule, with columns added to record tenant responses to a landlord dilapidations claim. Further columns are added, recording each parties’ respective views and comments as negotiations progress.

Section 18 (1) or Diminution Valuation – used to demonstrate a statutory cap on a claim for damages (dilapidations claim).The value is derived by calculating the sum of which a landlord’s interest in the property has changed, because of the breaches of lease covenant. This is known as a ‘diminution in value’ of the landlord’s interest. The Diminution Valuation is prepared by a specialist surveyor. It is not applicable in Scotland.

Terminal Dilapidations Schedule (lease end) – formal document prepared by a landlord forming part of the claim for damages (dilapidations claim). It lists items of lease liability, which a tenant has purportedly failed to undertake by the lease end.

Alex Charlesworth

Alex is head of Cushman & Wakefield Building Consultancy team and is responsible for all commercial building surveying services. He specialises in dilapidations and landlord and tenant related matters, including exit strategy. Alex is an authority on dilapidations and has written a number of articles and given presentations to both Clients and Peers. He is viewed by the industry to be a leading Dilapidations practitioner.