What are dilapidation charges?


Dilapidation charges are part of the standard process when it comes to commercial leases. In simple terms, dilapidations are exit costs applicable for tenants at the end of a lease. Whilst that may sound daunting, it is very much an expected part of a commercial tenancy. How these charges are calculated and what tenants can do to reduce costly expenses at the end of a lease are explored in this blog.

The tenant’s obligation
When landlords of commercial properties enter into a tenancy agreement with an individual business, it is with the understanding of the conditions of the building. The usual way that this is managed is by drawing up a schedule of conditions at the start of the lease. This is a valuable document because it sets out the condition of the property at the start of the tenancy and what the expectations will be around its state of repair at the end of the lease. It provides a base level and point of reference for a tenant to understand what is expected of them.

Dilapidation charges
Once the lease has ended on the commercial property, generally an assessment is carried out and documented in a report to set out potential dilapidation works. This is generally used in conjunction with the schedule of conditions that were set out at the start of the lease. These documents then clearly set out what work will be needed, and the charges applied. This may feel overwhelming but with the support of an experienced commercial property services company, these works can be addressed quickly and professionally. It can be worrying for a business leasing a commercial property to try to factor in unknown expenditures. The easiest way to ensure you are not hit with a potentially large sum in dilapidation charges at the end of your lease is to develop a schedule of planned maintenance with a property services company.

Preventing extensive dilapidation charges
A tenant who has entered a lease on a commercial property has an obligation to maintain the state of that building. The obligation is set out in the schedule of conditions but mitigating expenses and ensuring the business remains profitable throughout the tenancy is critical. The most sensible course of action most commercial tenants take is to engage a property maintenance company. Using a commercial building services company such as The Complete Property Group throughout the term of the lease ensures tenants can keep on top of damages and repairs and prevent costly dilapidation charges at the end of the lease. We have experience throughout countless property services we carry out in the Hampshire area and work alongside our clients - both tenant and landlord – to ensure continual planned maintenance is scheduled throughout the term of the lease to reduce costly dilapidation charges at the end.


The Complete Property Group is strategically located on the south coast and can support dilapidation works in Portsmouth, Southampton, Winchester, and West Sussex. Get in touch today.


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