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Dilapidations — Sustainable Exit & Green Lease Consultancy

Dilapidations inspections, schedules and lease exit advice — with MEES and sustainability built in.

Sustainability

Sustainable exit and green lease consultancy

Green leases, sustainability clauses and ESG reporting obligations are reshaping how commercial property is occupied and handed back. We help landlords and tenants navigate sustainable exit strategies — turning lease end from a dilapidations battle into an opportunity for measurable carbon, energy and waste outcomes.

We sit on either side of the table and write advice that holds up against ESG, MEES and net-zero commitments alike.

Who needs this?

Corporate occupiers, landlords and asset managers with green lease obligations, net-zero commitments or upcoming lease events on multi-site estates.

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Dilapidations

Dilapidations inspections, schedules and lease exit advice — with MEES and sustainability built in.

Plan a sustainable exit

Dilapidations surveys, schedules and lease exit — explained

Dilapidations is the process of dealing with a tenant's repair, decoration, reinstatement and compliance obligations at or near the end of a commercial lease. The terminology can be opaque, so here is what each stage actually involves and where a dilapidations inspection fits into a lease exit.

Dilapidations inspection (survey)

A physical inspection of the demise recording the condition of structure, finishes, services and tenant alterations against the obligations in the lease and licences for alterations. It is the evidence base for everything that follows, and it is the point at which energy performance and MEES exposure should also be captured.

Interim schedule of dilapidations

Served during the term, usually where disrepair is affecting the landlord's interest. It gives the tenant an opportunity to remedy breaches while still in occupation, which is almost always cheaper than dealing with them at exit.

Terminal schedule of dilapidations

Served at or shortly before lease expiry, setting out the works the landlord says are required to put the property back into the contractual condition. It typically covers repair, redecoration, reinstatement of alterations and statutory compliance items.

Schedule of condition

A photographic and written record of condition taken at lease commencement, limiting the tenant's repairing liability to that recorded standard. Where one exists, it usually reduces a terminal claim substantially — and it is the first document we ask for.

Scott Schedule and negotiation

A column-format schedule setting out the claimed item, the tenant's response and the parties' costings side by side. We can supplement the traditional Scott Schedule with sustainability commentary, MEES impact and embodied carbon implications to support settlement discussions.

Section 18(1) and the diminution cap

Damages for terminal dilapidations are capped by the diminution in the value of the landlord's reversion under Section 18(1) of the Landlord and Tenant Act 1927. Where a landlord intends to refurbish or upgrade the building anyway, the cap can materially reduce a claim — which is why the landlord's own MEES and refurbishment intentions matter to both sides.

Reinstatement of tenant alterations

Removing fit-out, partitions, cabling and plant installed during the term. Reinstatement decisions frequently have the largest carbon and cost impact of the whole exit, and default full strip-out is rarely the best answer for either party.

Lease exit strategy and MEES

Stripping a building back can reduce its EPC rating. If the building falls below the current EPC E minimum the landlord cannot lawfully re-let it, so MEES exposure should be modelled before reinstatement scope is agreed rather than discovered afterwards.

We act for both landlords and tenants across the UK — never on the same instruction — and frequently work alongside an existing dilapidations surveyor as the energy, MEES and sustainability specialist. Our particular focus is making sure the lease exit leaves the building lettable and the settlement defensible.

Example projects

Illustrative, anonymised scenarios showing how we typically approach this work. Details are representative rather than specific client records.

Office tenant · Birmingham

Terminal schedule reduced ahead of lease expiry

Challenge: A tenant received a terminal schedule including full strip-out of a recent, good-quality Category B fit-out and replacement of serviceable plant.

Approach: Inspection against the lease, Scott Schedule response, Section 18(1) diminution review and evidence that the landlord's letting agent preferred to keep the fit-out.

Outcome: Reinstatement items were narrowed to genuine breaches and a cash settlement was agreed without disruption to the move.

Retail landlord · Midlands

MEES-aware re-letting strategy

Challenge: A unit was returning with a borderline EPC and the proposed strip-out would have removed LED lighting and efficient heating.

Approach: EPC modelling of reinstatement options alongside the dilapidations schedule, then a negotiated package that retained the efficient services.

Outcome: The landlord avoided a lower EPC rating at re-letting and the tenant avoided unnecessary removal costs.

Industrial tenant · Warehouse

Break clause protected

Challenge: A conditional break required vacant possession and compliance with repair covenants within a tight timeframe.

Approach: Early interim inspection, prioritised works programme and photographic record of completed works before the break date.

Outcome: Works were targeted at the break conditions, giving the tenant a clear, evidenced exit position.

Where we add value

Green lease compliance

Drafting input and clause review covering data sharing, MEES, alterations and reinstatement.

Pre-exit risk reviews

MEES and EPC risk assessments to avoid stranded-asset liabilities at handback.

Circular reinstatement

Reuse, donation and waste-diversion strategies to cut embodied carbon at strip-out.

When to engage and how it runs

Earlier is always cheaper — ideally at lease drafting or 12–24 months before a break or expiry.

  1. 01

    Lease & obligation review

    Read the lease through a sustainability lens — green clauses, MEES, alterations and reinstatement.

  2. 02

    Risk & scenario mapping

    Identify MEES exposure, stranded-asset risk and ESG reporting implications.

  3. 03

    Exit strategy

    Agree the sustainable exit strategy with both legal and operational stakeholders.

  4. 04

    Negotiation support

    Support negotiations with the counterparty and their advisors.

  5. 05

    Handback execution

    Oversee circular strip-out, reuse and reporting through to handback.

How we help

A sustainability-first alternative to the traditional dilapidations fight.

Green lease drafting input and clause review (data sharing, MEES, energy targets, alterations, reinstatement)
Sustainable exit and reinstatement strategy aligned to ESG and net-zero plans
Pre-exit energy, MEES and EPC risk assessments to avoid stranded-asset liabilities
Circular-economy strip-out advice — reuse, donation and waste diversion over default reinstatement
Tenant and landlord advisory on sustainability KPIs, reporting and end-of-term compliance
Joined-up with our EPC, audit and PV teams

Common questions

How is this different from traditional dilapidations?

We focus on the sustainability layer — green lease compliance, MEES exposure, embodied carbon in reinstatement, and ESG-aligned exit planning — rather than purely contractual repair claims.

When should we engage you?

Ideally at lease drafting or 12–24 months before a break/expiry, so green lease obligations and reinstatement decisions can be planned strategically rather than reactively.

Can you act for both landlords and tenants?

Yes — though never on the same instruction. We work both sides of the market across the UK.

What's a 'green lease' and how does it affect dilapidations?

A green lease contains clauses on energy data sharing, MEES upgrades, sustainable alterations and reinstatement. These can dramatically change the scope and cost of dilapidations at lease end.

How does MEES interact with dilapidations?

If a building falls below the minimum EPC rating, the landlord can't re-let. Reinstatement decisions can push the EPC down further — so MEES exposure must be modelled before any strip-out is agreed.

What is circular reinstatement?

Reusing, donating or recycling fit-out elements rather than defaulting to full strip-out and landfill. It cuts embodied carbon, waste and often cost — and increasingly aligns with both parties' ESG targets.

Can you produce a Scott Schedule with sustainability commentary?

Yes — we can supplement the traditional Scott Schedule with sustainability commentary, MEES impact and embodied carbon implications for negotiation.

Do you work alongside our existing dilapidations surveyor?

Yes — we frequently sit alongside a traditional dilapidations team as the sustainability and MEES specialist, complementing rather than replacing existing advisors.

What evidence do you produce for ESG / CSRD reporting?

Waste diversion data, embodied and operational carbon savings, reuse percentages and MEES-uplift outcomes are documented so they flow directly into corporate sustainability reporting.

Can you advise on landlord-side reinstatement strategy?

Yes — we advise landlords on whether to accept reinstatement, take a cash settlement or negotiate a MEES-uplift package that improves the building for re-letting.

What is a schedule of dilapidations?

A document prepared for the landlord listing breaches of the tenant's repair, decoration, reinstatement and statutory obligations under the lease, with the remedial works and usually a costing. It can be interim (during the lease) or terminal (at or near lease end).

What does Section 18(1) of the Landlord and Tenant Act 1927 do?

It caps damages for disrepair at the reduction in the value of the landlord's reversion. If the landlord intends to redevelop or refurbish in a way that makes the repairs pointless, the claim can be significantly reduced.

What is the Dilapidations Protocol?

The Pre-Action Protocol for Claims for Damages in relation to the Physical State of Commercial Property at Termination of a Tenancy. It sets expectations for the schedule, quantified demand, the tenant's response and meeting to narrow issues before any court claim.

Should a tenant carry out the works or agree a cash settlement?

It depends on time, cost, business disruption and the landlord's plans. Doing works can be cheaper if well managed; a settlement gives certainty and avoids overrunning the lease. We model both options, including the carbon and EPC impact.

Can a break clause be lost because of dilapidations?

Yes, if the break is conditional on material or full compliance with covenants or vacant possession. Early inspection and a clear works plan reduce the risk of losing a break.

Related services

Frequently joined-up with dilapidations on multi-site estates.

Further reading

Articles from our insights that go deeper into dilapidations.

Multi-site estates

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