Dilapidations claims and consecutive leases: Problems and possible solutions

Abstract

This paper addresses the additional issues that may arise in a terminal dilapidations claim, where the expired lease is the last in a chain of two or more successively renewed leases. Analysis suggests that the most difficult of those issues concerns the tenant’s obligation to reinstate alterations, where the legal position is both complex and arguably inconsistent with the law regarding the tenant’s covenant to yield up the premises in good repair. Where legal issues of this kind impede settlement of a dilapidations claim by negotiation, court proceedings are not the only — or necessarily the best — way to proceed. Arbitration or expert determination can be a more cost-effective solution in many cases, but is under-used.