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ARTICLE · 26 JULY 2024

Dilapidations In Commercial Leases

DMH Stallard LLP
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Effective management of dilapidations liability hinges on precise lease drafting from the outset. Both landlords and tenants must ensure clear terms on repair, fit-out reinstatement, and sustainability to minimize disputes at lease end.

United KingdomReal Estate and Construction
Ben Price
Ben Price
Emily Wood
Emily Wood

Many consider dilapidations liability towards the end of the term of their leases, as the property will by then normally need some work, and this is also the point at which a dilapidations schedule is typically served by the Landlord.

However, a tenant's treatment of the property during the term is only half of the story, as dilapidations are effectively breaches of the lease terms relating to condition. Therefore, as the “rulebook” that governs the relationship between landlords and tenants, the lease is the reference point for a tenant's obligations, and these terms of the reference are fixed at the beginning and not the end of the term. It is the initial negotiation between landlord and tenant that is key.

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