England Commercial Maintenance & Dilapidations
Review commercial landlord maintenance obligations in England, including FRI lease structures, service charges, and dilapidation claims.
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England Commercial Maintenance & Dilapidations
Unlike residential tenancies (where the landlord bears an implied statutory duty to repair under Section 11 of the Landlord and Tenant Act 1985), commercial maintenance obligations in England are entirely governed by the terms of the lease. The lease determines who bears responsibility for every category of repair, from a leaking roof to a broken light fitting.
Maintenance Under FRI Leases
Under a standard Full Repairing and Insuring (FRI) lease (the norm for single-let commercial properties), the tenant is responsible for:
- All internal and external repairs.
- Structural maintenance (roof, foundations, external walls) — for single-let buildings.
- Keeping the property in the condition specified by the lease.
The landlord's obligation is typically limited to insuring the building (with the tenant reimbursing the premium).
Service Charges in Multi-Let Properties
In multi-let commercial buildings (office blocks, retail parks, shopping centres), the landlord manages the building's common areas, structure, and shared services, recovering costs via a service charge levied on each tenant.
RICS launched a new edition of its Service Charges in Commercial Property standard on 31 December 2025, updating the 2018 version. Key principles include:
- Costs must be transparent and supported by evidence.
- Landlords should provide an annual budget and year-end reconciliation with certified accounts.
- Charges should be reasonable and relate to services that benefit the tenants.
Dilapidations
Dilapidations are the most financially significant maintenance issue in English commercial property. At the end of a lease (or during the term via an "interim schedule"), the landlord can claim compensation from the tenant for breaches of the repairing covenant.
A terminal schedule of dilapidations is typically served at or near the lease expiry, itemising every defect and the estimated cost of remedy. Claims can run into tens or hundreds of thousands of pounds.
[!IMPORTANT] Section 18(1) Cap: The Landlord and Tenant Act 1927, Section 18(1), caps dilapidation damages at the diminution in the value of the landlord's reversion. If the landlord intends to demolish or substantially reconstruct the property, the dilapidation claim may be significantly reduced or extinguished entirely.
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