Section 18: the cap on damages
Section 18(1) of the Landlord and Tenant Act 1927 caps damages for breach of the repairing covenant at the diminution in the value of the reversion caused by the breach. If the landlord is going to demolish, refurbish or change use, the diminution may be nil regardless of the cost of the works in the schedule. The Section 18 valuation is one of the most powerful levers in tenant defence and frequently produces a settlement figure far below the cost-of-works figure.
Supersession and the landlord's intentions
Where the landlord intends works that supersede the disrepair (a strip-out and refit, change of use, demolition), the cost of the tenant's notional remedial works falls away to the extent it is superseded. Establishing the landlord's actual intentions through marketing evidence, planning applications, refurbishment specifications and direct enquiry is a routine part of effective tenant defence.
The Schedule of Condition: your defensive baseline
Where a properly prepared Schedule of Condition was taken at lease grant, items already present at that date are removed from the claim before negotiation begins. On older buildings this can take a substantial proportion of the claim out at the first defensive pass.
The Pre-Action Protocol response
The Pre-Action Protocol for Dilapidations Claims governs the formal exchange. Following service of the Quantified Demand, the tenant has a defined window (conventionally 56 days) to serve a particularised item-by-item response. That response shapes the negotiation and the eventual Scott schedule.
Common tenant mistakes
Paying the served figure to make the claim go away. Engaging a non-specialist surveyor. Missing the protocol response window. Ignoring an interim Schedule of Dilapidations during the term. And, most fundamentally, completing the lease at grant without a Schedule of Condition.