Dilapidations Estimate Calculator
Estimate an end-of-lease dilapidations claim from repair, redecoration, reinstatement and fees, and cap it at the loss in property value.
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At the end of a commercial lease the landlord can claim for breaches of the repairing, decorating and reinstatement covenants. The claim is usually a schedule of works plus professional fees and lost rent while they are carried out, and the first figure served is almost always the highest.
The important constraint is that a damages claim is generally limited to the actual reduction in the value of the landlord's interest. Where a building is about to be refurbished or redeveloped, that reduction can be far below the cost of the works.
How a claim is built
Repair and redecoration are usually estimated per unit of floor area, then reinstatement of any alterations is added. Professional fees are applied to the works, and lost rent while the works are carried out is added on top. The total is then compared with the reduction in value of the landlord interest, which acts as a ceiling.
Worked example
Three thousand square feet at 25 per square foot is 75,000 of repair and redecoration, plus 15,000 of reinstatement — 90,000 of works. Ten percent fees add 9,000 and lost rent 10,000, giving a claim of 109,000. If the actual loss in value of the landlord interest is 70,000, the liability is capped there, or about 23 per square foot.
Negotiate on the cap, not the schedule
Arguing item by item over a schedule of works is slow and usually moves the number very little. Establishing what the breaches actually cost the landlord in value — particularly where the building is to be stripped out or redeveloped anyway — moves it a great deal.
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Create your free property pageFrequently asked questions
What is a schedule of dilapidations?
An itemised list of alleged breaches of the repairing, decorating and reinstatement covenants, with a cost against each. It is an opening position prepared for the landlord, and the final settlement is typically well below it.
Why does the loss in value cap the claim?
Because damages compensate for actual loss rather than funding works. If the landlord intends to refurbish or redevelop, the disrepair may reduce the value very little, and in many jurisdictions the claim is limited accordingly.
Can I do the works myself instead?
Usually cheaper if you have time before the lease ends, since you control the contractor and the specification. Once the lease has ended the landlord controls the works and the claim, and the cost tends to rise.
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