The commercial lettings market has undoubtedly witnessed a resurgence in recent times especially in the retail sector. However, along with this increasing activity, the market is also experiencing a parallel increase in respect of the volume of instructions for dilapidations matters at the end of a lease term.

To explain this increase, aside from the upturn in the lettings market, the general consensus amongst property professionals is that lease terms as a whole are shorter (with the average lease length now considered to be approximately 5.8 years in contrast to the 15-25 year lease terms typically granted before the economic crisis) therefore making dilapidations processes more frequent as a matter of course.

Before the economic crash, landlords would often take a view in respect of a dilapidations claim, and absorb the costs themselves in order to secure a new tenant quickly. However, in a market which is recovering but where there is still significant pressure to minimise costs and expenditure, landlords are starting to focus increasingly more on recovering costs from tenants and protecting the asset value.

Both landlords and tenants ought to understand the financial implications of buildings being left in disrepair at the end of a tenancy. Having an understanding at the beginning of the process will benefit financial planning for both parties – an accurate forecast of potential costs upon lease termination will lessen the impact when (or if) a schedule of dilapidations is served by a landlord.

Therefore, the key consideration for landlords and tenants alike is to consider the implications of dilapidations from the outset, be well advised, and above all plan ahead to minimise the impact for potential wants of disrepair further down the line.