Guide
Schedule of dilapidations: interim, terminal, and what it must contain
Updated
The schedule is the document the whole matter runs on. Understanding what it is, and what it is not, is most of the battle for a tenant reading one for the first time.
What a schedule is
A schedule of dilapidations is a list of alleged breaches of a tenant's covenants, item by item, cross-referred to the clause in the lease said to be breached, with the remedial work the landlord says is required. It may be served with a costed column or without. It is prepared by a building surveyor and, in a terminal claim under the protocol, it must be endorsed.
Interim against terminal
- Interim schedule
- Served during the term, where the lease reserves a right to require repairs. Its purpose is to get work done while the tenant is still in occupation, and it typically comes with a notice to repair and a timescale.
- Terminal schedule
- Served at or after the end of the term, listing the breaches said to exist at yield up. Its purpose is a money claim, and it is the type the dilapidations protocol governs.
- Schedule of condition
- Not a schedule of dilapidations at all. It is a photographic and written record of the condition of the premises at a point in time, usually annexed to a lease to limit the repairing obligation. If your lease has one, it is the most valuable document in the file.
The endorsement requirement
The dilapidations protocol provides that the schedule should be endorsed either by the landlord, or where it is prepared by a surveyor, by the landlord's surveyor. The endorsement confirms that all the works set out in the schedule are reasonably required to remedy breaches and that the costings, if any, are reasonable (the dilapidations protocol). A schedule arriving without that endorsement is worth noting in any response.
How a tenant should read a schedule
- Start with the lease, not the schedule. Every item has to be tied to a covenant that actually binds you. Repair, decorate, reinstate and yield up are different obligations with different tests.
- Find the schedule of condition. If one is annexed, the repairing obligation may be limited to no worse than the recorded condition, which can remove large parts of a schedule at a stroke.
- Find every licence for alterations. Reinstatement obligations usually live there rather than in the lease, and they often depend on the landlord having required reinstatement in the right way and in time.
- Test each item against fair wear and tear where the lease qualifies the covenant, and against the standard of repair the lease actually sets.
- Look for supersession. If the landlord's own intended works would remove or replace the item, its cost may not be recoverable.
- Look for betterment. A claim to replace where repair would do, or to upgrade to a modern specification, goes beyond putting the landlord back in the position the covenant promised.
- Then think about value. Even a well-founded schedule is capped by section 18(1), see the diminution cap.
Getting a liability assessment before the lease ends is usually cheaper than answering a schedule afterwards, because there is still time to do the work yourself at your own contractor's price rather than pay damages calculated on the landlord's.