Guide
Dilapidations survey cost: what the surveyor's fee actually covers
Updated
The most useful thing anyone can tell you about dilapidations cost is that there are two numbers, and mixing them up is expensive on both sides of the transaction.
Two numbers, never one
- The fee
- What a building surveyor charges to inspect, read the lease and licences, and produce a schedule, a response, a liability assessment or a negotiated settlement. A professional fee, scoped on floor area and complexity.
- The claim
- The damages a landlord seeks for breaches of the repairing, decoration, reinstatement and yield-up covenants. Capped by section 18(1) of the Landlord and Tenant Act 1927 at the diminution in the value of the landlord's reversion (legislation.gov.uk).
A schedule total is not the fee, and it is also not the liability. Tenants who read a schedule as a bill, and landlords who treat a costed schedule as money in the bank, both end up disappointed. The money-lines table separates all seven streams.
What moves the surveyor's fee
- Floor area and building type. Inspection time scales with the premises; a multi-storey office with plant, lifts and a curtain wall takes longer than a single-let warehouse of the same area.
- Whether costings are included. A schedule can be served with or without a costed column. Costing every item is significant extra work.
- Licences for alterations. Every licence has to be found, read and mapped to what is physically in the building. Long-occupied premises with several licences are the most time-consuming case.
- Which side you are on and what has already been served. A response to a long, fully costed schedule is a different exercise from preparing one.
- Access and occupation. Inspecting occupied premises out of hours, or premises where fit-out conceals the structure, adds visits.
- How far the matter runs. A schedule is one instruction; negotiation to settlement, a diminution valuation and expert work in proceedings are separate ones.
How to compare fee proposals
- Ask what the fee covers and where it stops. Preparing the schedule only, or the schedule plus negotiation to settlement? The second is where most of the value sits.
- Ask whether costings are included, and whether the surveyor will endorse the schedule as the protocol requires.
- Ask about a diminution valuation separately. It is a distinct valuation instruction and often a different person; do not assume it is bundled.
- Ask for the basis: fixed fee for a defined scope, hourly rate for anything beyond it, or a percentage arrangement. Understand what any percentage is a percentage of before agreeing it.
- Send every surveyor the same information: the lease, any schedule of condition, the licences for alterations, the floor area and the termination date.
The cost per square foot question
Tenants and finance teams often want a cost-per-square-foot figure for budgeting, and the market does talk in those terms. Treat any such figure with care. It is derived from other buildings with other covenants, other schedules of condition and other landlord intentions, and section 18(1) means the recoverable sum depends on what the breaches do to the value of your landlord's reversion. A benchmark can start a conversation with a board; it cannot support a provision, and it will not survive contact with a properly argued response. Get a liability assessment on the actual lease instead. See office dilapidations.
Nothing here is legal advice. Whether a particular item is a breach of your covenants, and what it is worth, are questions on the facts of your lease and your building.