What Happens If You Ignore Dilapidations?

Most commercial tenants know dilapidations exist. Far fewer take them seriously until it's too late. This post covers exactly what happens when you do nothing — and why the cost of ignoring it is almost always higher than the cost of dealing with it.

First, What Does "Ignoring" Actually Look Like?

It's rarely a deliberate decision. It usually looks like this:

• You're focused on the move and the dilapidations get pushed back
• You assume the landlord won't bother, or that it'll settle for a small amount
• You hand back the keys without doing any reinstatement work
• You receive a Schedule of Dilapidations and put it in a drawer

Each of these paths leads to the same place. The liability doesn't go away — it grows.

What the Landlord Can Do

When you hand back a commercial property in breach of your lease obligations, the landlord has several options.

Serve a Schedule of Dilapidations

This is a formal document listing every breach — every repair not done, every alteration not reinstated, every decoration obligation not met. It comes with a cost attached. That cost reflects what the landlord says it will take to fix everything you didn't.

Most tenants who ignore the process entirely receive a Schedule that is larger than it needed to be. Landlords and their surveyors have no reason to be conservative when the tenant hasn't engaged.

Pursue a Financial Claim

If you don't respond or dispute the Schedule, the landlord can pursue you for the full amount as a debt. This can go to court. The Landlord and Tenant Act 1927 does cap damages — the landlord can't recover more than the actual diminution in property value — but that cap doesn't apply until it's argued. If you're not there to argue it, you don't benefit from it.

Withhold the Deposit

If you paid a deposit at the start of the lease, the landlord can apply it against the dilapidations claim. In most cases the deposit doesn't cover the full claim — it just gets absorbed and the balance is still owed.

Carry Out the Works and Bill You

In some cases the landlord will simply instruct their own contractors to do the reinstatement and send you the invoice. You lose all control over scope, specification, and cost. Landlord-managed reinstatement is almost always more expensive than tenant-managed reinstatement — and you have no say in it.

The Real Cost of Doing Nothing

Here's where most tenants get this wrong. They assume ignoring the problem saves money. It doesn't. It shifts money from a controllable cost to an uncontrollable one.

When you manage your own reinstatement:

• You choose the contractor
• You control the scope
• You can negotiate what's actually required under the lease
• You complete the work to standard and on your terms

When the landlord manages it after you've walked away:

• Their contractor, their rates, their specification
• No competitive tendering
• Professional fees added on top
• Potential loss of rent claimed for the period the works took
• Legal costs if it escalates

A tenant who hands back a 5,000 sq ft office without doing any work might face a Schedule for £60,000–£80,000. The same reinstatement, managed by the tenant with a good contractor, might cost £30,000–£40,000. The gap is the price of ignoring it.

What Happens If It Goes to Court

Most dilapidations disputes don't reach court — they settle. But some do, and if yours is one of them, the process is slow and expensive for both sides.

If a county court judgment is made against you:

• It affects your credit rating
• It can be enforced against your business assets
• Interest accrues on the unpaid amount
• The landlord's legal costs may be added to the judgment

For a business that's just moved premises and is managing cash flow carefully, a county court judgment at this point is the worst possible outcome. It's also entirely avoidable.

The Section 18 Cap — and Why It Doesn't Automatically Protect You

Many tenants have heard that Section 18(1) of the Landlord and Tenant Act 1927 limits what a landlord can recover. This is true — damages are capped at the reduction in the property's market value caused by the disrepair, not just the cost of the works.

But two things are worth understanding:

First, this cap only helps you if you raise it. If you don't respond to the claim, the landlord isn't obliged to limit themselves voluntarily. The protection exists in law, but you have to be present to use it.

Second, in many cases the diminution in value and the cost of works are close to the same number. The cap is most useful when a landlord is claiming for works they never intend to carry out — for example, if they're redeveloping the building. In standard cases, simply pointing to Section 18 doesn't dramatically reduce the bill.

Professional advice from a surveyor who knows how to argue diminution is what actually reduces the claim. That advice is only available if you engage.

What About Fair Wear and Tear?

Most leases exclude fair wear and tear from the repairing obligation. This means normal deterioration from everyday use — gradual fading, minor scuffs — isn't your liability.

But fair wear and tear is narrower than most tenants assume. It doesn't cover:

• Damage caused by negligence or misuse
• Alterations you made and didn't reinstate
• Systems you didn't service
• Decoration you never did during a long lease
• Flooring worn beyond what's reasonable for the period

Tenants who rely on "it's just wear and tear" without taking advice often find the argument doesn't hold as far as they expected.

The Timing Problem

Dilapidations don't have a statute of limitations that kicks in quickly. A landlord has up to six years to bring a claim after the lease ends (twelve years if the lease was executed as a deed). Assuming the problem will just go away is a common and costly mistake.

Some landlords sit on claims while interest builds. Others wait until they've completed their own works and have actual expenditure to point to. Either way, the debt doesn't expire on the day you handed back the keys.

What You Should Do Instead

The alternative to ignoring dilapidations isn't necessarily spending a large sum immediately. It's engaging early enough to control the outcome.

Start 12 months before lease expiry. Review your lease obligations. Walk the property. Understand what's actually required versus what you think is required — those are often different.

Get a professional assessment. A dilapidations contractor or surveyor can tell you what the realistic scope looks like before the landlord serves their Schedule. That gives you options.

Do the works yourself. In most cases, completing reinstatement before handover is cheaper than any alternative. You control cost, quality, and timing.

If you've already received a Schedule, respond to it. Don't ignore it. Get advice on what's reasonable, what's inflated, and what Section 18 might do to the figures. Then negotiate from a position of knowledge rather than silence.