If you're coming to the end of a commercial lease, one question almost always comes up: how much should I budget for dilapidations at the end of my lease?

For many commercial tenants, the schedule of dilapidations — a formal list of repairs, reinstatement and redecoration the landlord expects under the lease agreement — can be a shock. The sums can be big, and without making a financial provision, they can cause serious cash flow problems.

In this guide we'll look at what dilapidation costs usually involve, what sort of figures you might expect in the UK, and the kind of work that tends to appear on a landlord's schedule. We'll also cover the main cost drivers, how the dilapidations process works, and what you can do before the end of the lease to keep the numbers under control.

The Short Answer on Dilapidation Costs

There's no single figure, but there are decent benchmarks. RICS data puts the average across all sectors at about £7.27 per sq ft. In modern offices, you're more likely to be in the £15–£25 per sq ft range for reinstatement, redecoration and minor repairs. Some advisors suggest allowing roughly a year's rent, especially if you've got a high-spec fit-out or a long lease term.

For example, a 10,000 sq ft office at £20 per sq ft means £200,000 as a starting point. Add 10–15% for professional fees, plus a contingency of 10–20%, and you could be looking closer to £250,000. With BCIS reporting that typical dilapidations works rose by 17.7% between 2021 and 2023, old estimates can quickly fall short.

A quick rule of thumb: Floor area (sq ft) × £15–£25 + 10–15% fees + 10–20% contingency. Then compare it with a year's rent as a sense-check.

Want a number for your specific property?

Our free dilapidations liability calculator lets you build a surveyor-style estimate from the bottom up — enter your office size, scope of works and commercial context, and get an instant cost range broken down by section. Useful for setting a provision, sense-checking a landlord's schedule, or preparing for negotiation.

What the Numbers Really Mean in a Dilapidations Claim

It's tempting to think the dilapidations claim is just the cost of the building work, but a landlord's building surveyor will usually include plenty on top.

Take a recent example from a small London office of just under 500 sq ft. The tenant had added a couple of partitions, reconfigured some lighting, and put in a small tea point. At the end of the lease, the landlord's schedule included:

  • Building works: £9,695
  • Preliminaries / Overheads & Profit (15%): £1,454
  • Project fees (design, H&S/CDM, contract admin): £1,059
  • Professional fees (landlord's surveyor, legal, negotiations): £2,900

That comes to £15,108 — and over a third of it isn't for the actual repairs or reinstatement. This is why planning just for the works is risky. You'll nearly always have to allow for prelims, project fees, and professional fees. And don't just take their word for what the works will cost — getting your own contractor prices gives you something solid to challenge with.

Typical Repair Obligations at Lease End

No two schedules are identical, but most commercial property tenants see some mix of:

  • Reinstating layouts — removing partitions or meeting rooms you've built, repairing walls, floors and ceilings
  • Lighting changes — putting fittings back where they were or swapping upgrades for the landlord's standard kit
  • Floor finishes — replacing carpet, vinyl or tiles to the original spec
  • Decorating — repainting in neutral colours
  • Ceiling and services work — fixing grids or tiles, moving HVAC diffusers, reinstating detectors
  • Removing joinery — taking out kitchens, counters or shelving you added
  • M&E removals — stripping out cabling, data points, or specialist kit
  • General repairs — anything beyond fair wear and tear

Even genuine improvements can end up on the list if your repair obligations say the space must be returned to its original state.

How Commercial Tenants Can Prepare

Start with the lease. A full repairing and insuring (FRI) lease often makes the occupier responsible for all repairs — sometimes even for defects that were there when you moved in, unless a schedule of condition was agreed. Licences for alterations matter too. Many say you must remove your fit-out — even the nice bits — at lease end.

If you're still at the negotiation stage of a new lease, these dilapidations clause details can make a huge difference to your future liability.

Why Fit-Outs Can Cost You Twice: Once In, Once Out

Every alteration you make has a cost going in and possibly another coming out. Partition walls, specialist lighting, extra cabling, bespoke joinery and AC changes can all be on the reinstatement list. Even if you've upgraded the space, the landlord can still insist you remove it. One law firm client installed a high-end café area in reception — the strip-out cost more than the original install.

Maintenance During the Tenancy Reduces the Bill

Keeping up with maintenance is one of the easiest ways to reduce your dilapidations claim. Repainting worn areas, fixing small leaks, replacing cracked tiles and servicing HVAC equipment all help keep the final list shorter. If you leave everything to the last few months, you'll face a long list and no time to get it done cheaply. Keeping dated photos and a photographic schedule of condition alongside receipts for works can be invaluable evidence if there's any dispute at the end of the lease.

The Landlord and Tenant Dynamic

If the landlord and tenant relationship is constructive, you might agree to leave some alterations in place. If the landlord plans to strip out or refurbish the commercial property, some works may be "superseded". Under Section 18(1) of the Landlord and Tenant Act 1927, they can't recover more than the drop in the property's value caused by your breaches. It's a useful point in negotiations, but you'll need a good building surveyor to argue it.

The Dilapidations Process in Brief

Well before lease end, a switched-on tenant gets their own surveyor to check the space. This "tenant's assessment" gives a realistic view of your repair obligations and helps set an allowance. Near the end, the landlord's surveyor serves the schedule of dilapidations, often with a quantified demand. Both sides are expected to follow the RICS Dilapidations Pre-Action Protocol, which is meant to keep things reasonable.

Your surveyor replies, challenging items that go beyond the lease agreement or are overpriced. Most cases settle through negotiation or by you choosing to carry out the work.

Doing the Works Yourself vs Paying a Settlement

If you choose to carry out the work yourself, you keep control over scope, timing and cost — and you can often agree the standard directly with your building surveyor. Settling with a lump sum is easier but can be dearer unless you push back hard.

A Sensible Timeline

From the start of your lease agreement, set aside a realistic allowance each year for dilapidation costs. Halfway through a longer lease term, review after major fit-outs. In the final 6–12 months, get a formal building survey assessment, price up the works, and start talking.

Dilapidations are a known exit cost of leasing a commercial property — if you treat them that way. Read your lease agreement, look after the place, and get expert help early. A realistic allowance, with sector-appropriate £/sq ft figures, fees and a contingency, keeps you in control.

Further Reading