Month: September 2025

A tenant on Charlotte Street rang us in March, eleven weeks out from expiry on 4,200 square feet across two upper floors. He wanted everything: full deep clean, carpet extraction, ceiling tiles wiped down, kitchen extract certificated, glass in and out. His finance director had already signed the budget off. I asked whether he had seen the schedule of dilapidations yet. He had not. Nobody had served one. He was proposing to spend the better part of nine thousand pounds cleaning to a standard that no surveyor had yet written down, in the hope it would soften a claim he had not read.

We did the work in the end. About a third of it.

That gap – between what tenants assume they owe and what a landlord can lawfully recover – is where most of the money goes missing in a Fitzrovia lease exit. Cleaning is the part of dilapidations people feel confident about, because everyone understands dirt. It is also the part most often paid for twice.

What is a schedule of dilapidations asking you to do?

A terminal schedule is a list of alleged breaches of your lease covenants, served at or near the end of the term, usually with a quantified demand attached putting a figure against each line. The Pre-Action Protocol for dilapidations claims expects the landlord to serve it within a reasonable time, generally taken as 56 days after the term ends, with the tenant’s response due 56 days after that. It is a claim for damages for breach of contract. It is not an invoice for a service you have ordered.

That distinction has teeth. Because the payment compensates the landlord for a building returned out of covenant, HMRC treats dilapidations settlements as normally outside the scope of VAT – the position confirmed in Revenue and Customs Brief 2 (2022), effective from 1 April 2022, after eighteen months of the industry holding its breath. So when a landlord’s agent sends you a builder’s quote for the cleaning works plus VAT and calls it your liability, they have already told you something about how carefully the claim was assembled.

Where does the cleaning sit in the schedule?

Almost never under its own heading. Cleaning gets distributed. Some of it hides in the yield-up covenant, which in a standard institutional lease of a W1T upper floor might require the premises handed back “clean and tidy” or “in a clean and decorated condition”. Some of it sits inside repair items, where a stained ceiling tile is described as damaged rather than dirty. Some of it is smuggled into redecoration.

Read the covenant wording before you read the prices. A covenant to yield up clean is a different obligation from a covenant to keep in good and substantial repair, and the second one is subject to a statutory cap that the first one may not be.

Why does Section 18(1) put a ceiling on the bill?

Section 18(1) of the Landlord and Tenant Act 1927 is the most useful sentence in commercial property law and the least read. Its first limb says damages for breach of a covenant to keep or put premises in repair cannot exceed the amount by which the value of the landlord’s reversion is diminished by the breach. The second limb goes further: no damages at all where the premises are to be pulled down, or structurally altered in a way that would render the repair works valueless, shortly after the term ends.

Think about what that means for a floor in Fitzrovia in 2026. The landlord’s agent serves a £180,000 schedule. Meanwhile the asset manager has already appointed a Cat A contractor to strip the floor to slab, put in a new metal ceiling raft and an exposed-services scheme, and chase a higher rent from a tech tenant off Berners Street. The old mineral fibre grid is going in a skip in week two. Cleaning it achieves precisely nothing for the value of the reversion.

Surveyors call this supersession. The RICS professional standard on dilapidations in England and Wales, seventh edition, reissued in December 2023, includes a suggested letter for surveyors to send their landlord clients asking them to confirm their intentions for the building. Ask whether that letter was sent. Ask what the answer was.

What if the landlord will not tell you their plans?

Then look at the building. Scaffold licences, a planning application on the borough portal, a marketing brochure advertising a fully refurbished Grade A floor with a target availability date four months after your expiry – all of it is evidence, and none of it requires the landlord’s cooperation to find. A quantified demand is an opening bid. Surveyors who tell you otherwise are being paid by the other side.

Where does cleaning end and reinstatement begin?

This is where the real money sits, and where most disputes I see are won or lost.

Carpet tiles first. Almost every terminal schedule for a London office floor contains a line demanding replacement of the carpet, and almost every one of those lines is worth arguing with. Tiles have a design life. A fusion-bonded tile laid in 2013 and walked on by ninety people a day for twelve years has reached the end of it, and returning a landlord a floor covering in better condition than fair wear and tear would leave it is betterment, which you do not owe. Encapsulation cleaning will lift most traffic-lane soiling from a nylon tile and costs a fraction of replacement. It will not lift eleven years of ultraviolet fade along the south elevation, and no honest contractor will tell you it does.

Where a tenant has damaged tiles rather than worn them – a burst humidifier, an unbagged plant pot, a chair castor that has shredded the pile in one bay – the answer is often tile rotation. Pull matching tiles from beneath permanent storage or the under-desk zones, swap them into the visible areas, and put the damaged ones where nobody looks.…