End of lease dilapidations:
pay the bill or do the works?

When a commercial lease comes to an end, many tenants are faced with a dilapidations bill from their landlord. The dilemma is simple but important: should you pay what's being asked, or carry out the works yourself?

This decision affects your costs, the negotiation process, and how smoothly you hand back the premises at the end of the tenancy.

What is a Dilapidations Bill in a Commercial Lease?

At lease expiry, a landlord may instruct their surveyor to prepare a Schedule of Dilapidations. This sets out items of disrepair, reinstatement and decoration they believe you should deal with under the lease. It is usually followed by a quantified demand — a formal dilapidations claim for the cost of the works.

The key point is that this is not a final invoice. It is the landlord's opening position, and you have the right to review it, challenge it, or choose to carry out the works yourself.

Why Has Your Landlord Served a Schedule of Dilapidations?

Most lease agreements contain repairing covenants. As the lease ends, the landlord's surveyor inspects the property and highlights any breaches. Common items include decoration, minor repairs, flooring reinstatement, and general disrepair.

A schedule may be served while the lease is still running — known as terminal dilapidations — or after you have vacated, in which case the landlord is seeking a financial settlement. Either way, they are entitled to make a claim for dilapidations if they believe the property has not been returned in the required condition.

Paying Your Landlord's Dilapidations Bill

Settling the claim by paying can feel straightforward. It gives you cost certainty, avoids the hassle of organising contractors, and brings closure.

But there are risks. Landlords' claims are often overstated, with surveyors including inflated contractor rates, professional fees and even rent loss. You may end up covering works that are unnecessary or will be undone in redevelopment.

If you decide to pay, treat it as part of a wider negotiation. Challenge figures that look unreasonable and make sure the settlement reflects the actual condition of the premises, not just the landlord's first demand.

Carrying Out Dilapidations Works Yourself

The alternative is to arrange the works before the lease ends. By doing so, you control the cost through competitive contractor quotes and ensure the works meet your lease obligations. This route is often more economical, as landlord claims usually include overheads and contingencies that push the cost higher.

Managing works does take effort, and there is always a chance of uncovering extra disrepair. However, tenants who prepare in advance often find themselves in a stronger position, supported by real contractor pricing during negotiation.

Legal and Practical Factors to Be Aware Of

• Section 18 of the Landlord and Tenant Act 1927 caps damages at the diminution in value of the property. A landlord cannot recover more than the actual reduction in value caused by disrepair.
• The Dilapidations Protocol, part of the Civil Procedure Rules, sets out a fair process and allows 56 days for a tenant to respond to a quantified demand. Its purpose is to encourage transparency and avoid exaggerated claims.
• If a schedule of condition was agreed at the start of the tenancy, liability is limited to bringing the premises back to that documented state.
• If the landlord intends to redevelop, many items in their claim may not be recoverable — a principle known as supersession.

Independent advice from a dilapidations surveyor or solicitor can help you test the landlord's position and prepare for dispute resolution if needed.

How Tenants Can Negotiate a Claim for Dilapidations at Lease Expiry

There isn't one right answer for every situation. Paying may suit tenants who want speed and certainty. Carrying out works tends to give more control and usually keeps costs down.

A practical approach is to compare the landlord's claim with independent contractor pricing. Our free dilapidations liability calculator lets you build a surveyor-style estimate for your specific demise — broken down by section — so you can quickly see where the landlord's figures are reasonable and where they may be inflated. This evidence strengthens your position in negotiation and ensures you only cover the works genuinely required to bring the commercial property back to its agreed state. In some cases, a blended outcome works best — you complete certain reinstatement items and agree a financial settlement for the rest.