The measure of damages a landlord can recover for breach of the repair covenant following expiry of a lease is the reasonable cost of doing the necessary works, plus where appropriate, loss of rent for the period until the works have been completed. Recovery is however limited to the amount by which the value of the premises has been reduced by disrepair pursuant to section 18 of the Landlord and Tenant Act 1927 (the "section 18 cap").
Dilapidations claims at expiry of a lease may also extend to breaches of other tenant covenants, typically those relating to decoration, compliance with statute, reinstatement of alterations and, where applicable, the removal of fixtures. Damages for those breaches are not limited by the section 18 cap, so care should be taken to ensure losses are correctly allocated.
Landlords might also be able to avoid the section 18 cap if there is specific provision in the lease. Such provisions apply if the tenant has breached its repair obligations, and require the tenant to pay an amount equal to the rent for such period as it would reasonably take to put the property into repair. The landlord can claim this sum as a contractual debt rather than as part of a dilapidations claim.