By Mark Blenkinsop, director at CHPK Group
Interim dilapidations is a document served by a landlord during a lease to notify a tenant of a breach of their repair obligations.
Interim dilapidations can bring substantial advantages for landlords looking to preserve the quality and value of their assets throughout long leases, which is particularly important in the present economic landscape. However, this underused mechanism is often misunderstood or seen as a punitive action. It’s crucial to transform outdated perceptions and normalise the practice of interim dilapidations in the commercial real estate sector, not just to save unnecessary conflict but also substantial costs.
Better asset management
The core purpose of interim dilapidations is to ensure effective property maintenance. Therefore, they should only include items that can either cause further damage to the property, have a wider impact on other people outside the property, or legislation breaches. A principal advantage is that these schedules enable the identification of any potential problems early which, if left unchecked, could become progressively worse and lead to far bigger repairs and major cost implications further down the line, such as corrosion, or extensive roof repairs etc.
It is surprising that this is such an underused mechanism and not standard practice. In part, this comes down to negative perceptions. An interim schedule of dilapidations, unlike terminal dilapidations, is served by landlords during the lease term rather than at the end, outlining any disrepair and focused on ensuring the optimum condition of a property throughout a lease. While this may sound like a helpful way to maintain assets by avoiding serious deterioration in the longer-term, interim dilapidations have traditionally been perceived as an adversarial act. Industry adoption may also be limited because asset managers and landlords either have no knowledge of the existence of interim dilapidations or lack the time and resources to benefit from them.
The industry must take a more positive approach towards interim dilapidations as a useful tool for repair and maintenance. Landlords can prolong the life of properties, safeguarding portfolios and asset value by keeping them in optimum condition throughout leases. Tenants, meanwhile, have the opportunity to plan ahead for any funds required to conduct repairs – gaining more control of the situation and better cost efficiencies, rather than receiving one large bill at the end.
Effective risk management
Given the UK’s current economic climate, there is a higher risk of receivership activity in the market. According to the latest data from the Insolvency Service, monthly company insolvency figures to September 2025 were slightly above the same period in 2024.
With the ever-present possibility of occupiers entering administration, landlords need to ensure that they are not left with big dilapidations liabilities at lease end. To mitigate the risks, it’s more important than ever for landlords to take a proactive approach when it comes to the condition of their properties, not only at the very end but also during the lease. This seems the logical approach to safeguard assets, even more so when bearing in mind that some leases can run up to 15 years long.
Changing old mindsets
What needs to happen to change ingrained attitudes towards interim dilapidations and see them as a force for good? First, an element of education for the wider industry to understand that they do not constitute a hostile document or a penalty, but rather a signposting of how to ensure properties remain in good condition – which is in everyone’s best interests – facilitating better planning and resilience. Interim dilapidations can be a smart strategy at a time of uncertain economic outlook, too.
Second – and this is vital – interim dilapidations should emerge from a collaborative process between landlords and tenants, based on early engagement, rather than an unexpected sting. This will not only build stronger relationships but ensure that both benefit and meet their respective obligations, ultimately preventing complex and expensive disputes at the end of tenancies (or needing to go down extreme avenues such as the Jervis v Harris clause, or Section 146).
Flipping old mindsets around interim dilapidations and encouraging closer collaboration and engagement between landlords and tenants can have other positive knock-on effects, such as incorporating environmental and sustainability considerations into the dilapidations process earlier on – a key issue for a sector in urgent need of decarbonisation to align with national targets.
As an industry, we need to recognise that, when used correctly, adopting this underused mechanism can carry multiple benefits for all sides.
