By Mark Blenkinsop, director at CHPK Group
Interim dilapidations is a doc served by a landlord throughout a lease to inform a tenant of a breach of their restore obligations.
Interim dilapidations can deliver substantial benefits for landlords trying to protect the standard and worth of their property all through lengthy leases, which is especially essential within the current financial panorama. Nevertheless, this underused mechanism is usually misunderstood or seen as a punitive motion. It’s essential to remodel outdated perceptions and normalise the follow of interim dilapidations within the business actual property sector, not simply to avoid wasting pointless battle but additionally substantial prices.
Higher asset administration
The core goal of interim dilapidations is to make sure efficient property upkeep. Due to this fact, they need to solely embody objects that may both trigger additional injury to the property, have a wider affect on different folks exterior the property, or laws breaches. A principal benefit is that these schedules allow the identification of any potential issues early which, if left unchecked, may turn out to be progressively worse and result in far larger repairs and main value implications additional down the road, reminiscent of corrosion, or in depth roof repairs and so on.
It’s shocking that that is such an underused mechanism and never normal follow. Partly, this comes right down to unfavourable perceptions. An interim schedule of dilapidations, in contrast to terminal dilapidations, is served by landlords in the course of the lease time period quite than on the finish, outlining any disrepair and targeted on guaranteeing the optimum situation of a property all through a lease. Whereas this will likely sound like a useful method to keep property by avoiding severe deterioration within the longer-term, interim dilapidations have historically been perceived as an adversarial act. Business adoption might also be restricted as a result of asset managers and landlords both don’t have any information of the existence of interim dilapidations or lack the time and sources to learn from them.
The business should take a extra constructive strategy in the direction of interim dilapidations as a useful gizmo for restore and upkeep. Landlords can extend the lifetime of properties, safeguarding portfolios and asset worth by preserving them in optimum situation all through leases. Tenants, in the meantime, have the chance to plan forward for any funds required to conduct repairs – gaining extra management of the state of affairs and higher value efficiencies, quite than receiving one massive invoice on the finish.
Efficient danger administration
Given the UK’s present financial local weather, there’s a larger danger of receivership exercise out there. In accordance with the newest information from the Insolvency Service, month-to-month firm insolvency figures to September 2025 have been barely above the identical interval in 2024.
With the ever-present risk of occupiers coming into administration, landlords want to make sure that they aren’t left with massive dilapidations liabilities at lease finish. To mitigate the dangers, it’s extra essential than ever for landlords to take a proactive strategy relating to the situation of their properties, not solely on the very finish but additionally in the course of the lease. This appears the logical strategy to safeguard property, much more so when making an allowance for that some leases can run as much as 15 years lengthy.
Altering previous mindsets
What must occur to alter ingrained attitudes in the direction of interim dilapidations and see them as a drive for good? First, a component of training for the broader business to grasp that they don’t represent a hostile doc or a penalty, however quite a signposting of how to make sure properties stay in good situation – which is in everybody’s finest pursuits – facilitating higher planning and resilience. Interim dilapidations is usually a sensible technique at a time of unsure financial outlook, too.
Second – and that is very important – interim dilapidations ought to emerge from a collaborative course of between landlords and tenants, primarily based on early engagement, quite than an surprising sting. This won’t solely construct stronger relationships however make sure that each profit and meet their respective obligations, in the end stopping complicated and costly disputes on the finish of tenancies (or needing to go down excessive avenues such because the Jervis v Harris clause, or Part 146).
Flipping previous mindsets round interim dilapidations and inspiring nearer collaboration and engagement between landlords and tenants can produce other constructive knock-on results, reminiscent of incorporating environmental and sustainability issues into the dilapidations course of earlier on – a key situation for a sector in pressing want of decarbonisation to align with nationwide targets.
As an business, we have to recognise that, when used appropriately, adopting this underused mechanism can carry a number of advantages for all sides.
