Terminal Dilapidations

Commercial or terminal dilapidations refer to items of disrepair covered by repairing covenants contained in the lease.

The term covers breaches of the tenant’s covenants about the physical state of the premises when the lease ends. Breaches of the following types of covenant are usually relevant to the tenant’s liability for dilapidations:

  • Repairing covenant
  • Decorating covenant
  • Covenant to comply with statute
  • Covenant to yield up and any related obligations that specify the state in which the tenant is required to leave the premises at the end of the term