If you’re a tenant facing a dilapidations claim at the end of your lease, you might be feeling overwhelmed. You’re not alone as many tenants are surprised to learn that the cost of repairs doesn’t always equal the amount a landlord can claim. That’s where Section 18(1) of the Landlord and Tenant Act 1927 comes in.
What Is Section 18(1) of the Landlord and Tenant Act 1927?
This section limits the amount a landlord can claim for disrepair at the end of a lease. It ensures that landlords can’t recover more than the actual loss in value caused by the disrepair. So, if the work would cost £100,000 but the property’s value only drops by £30,000 if the works aren’t carried out, the landlord can only claim £30,000.
The Two Key Tests
When assessing a dilapidations claim, two important questions arise:
What Is the diminution in value?
This asks: How much less is the property worth because of the tenant’s breaches?
- If the cost to repair is £100,000, but the property’s market value is only reduced by £30,000 due to that disrepair, the landlord can only recover £30,000.
Would the premises have been redeveloped or altered anyway?
If the landlord planned to redevelop, refurbish, or demolish the building immediately after the lease ended, making the repairs irrelevant, then:
- The tenant may owe nothing, even if there were breaches because the disrepair caused no actual loss.
Why This Matters
Section 18(1) protects tenants from inflated or unfair claims, particularly in cases where:
- The property is likely to be redeveloped or refurbished, rendering repairs pointless.
- The cost of repair far exceeds the impact on the property’s market value.
Always ask, would the disrepair genuinely reduce the property’s value? Engage a specialist surveyor to assess any diminution in value and lawyer to help negotiate a sensible settlement
If you’re facing a dilapidations claim and need assistance in dealing with your landlord, don’t hesitate to contact Caroline Knowles-Ley on caroline.knowles-ley@cognitivelaw.co.uk or call 01243 943203.