Damages Cap

In each of the jurisdictions: England & Wales, Ireland and the Isle of Man, a statute exists that caps the damages a landlord is entitled to receive for disrepair by a tenant to the lower of the Cost of the Remedial Works (assessed by a chartered building surveyor), or the effect on the property’s value (assessed by a chartered valuation surveyor). Commonly, the impact on value is far less.

A similar legal cap applies to covenants to redecorate and reinstate tenant’s alterations.

In each of the jurisdictions Scotland and Northern Ireland, there is no such statutory cap on damages. There are emerging common law provisions which can nonetheless, in certain circumstances, cap the damages to less than the Cost of Works. We have considerable experience in all jurisdictions and can therefore provide more detailed advice on a case-by-case basis.

The position in each jurisdiction is summarised as follows:- 

England & Wales

Section 18 (1) of the Landlord & Tenant Act 1927 is the statutory cap whereby the damages a landlord is entitled to receive for disrepair will be the lower of the Cost of the Remedial Works or the effect on the property’s value. Moreover, if the property is to be demolished, or substantially reconfigured, the damages may be nil.

Key documents providing rules and guidance on dilapidations disputes in England & Wales are as follows:-

• Dilapidations in England and Wales (7th Edition) by RICS.
• The Dilapidations Protocol.

Scotland

As noted above, there is no statutory cap on damages in Scotland, but evolving case law can, in certain cases, still cap damages to less than the Cost of Works.

The key guidance document is:-

• Dilapidations in Scotland (2nd Edition)’by RICS.

Isle of Man

There is a statutory cap in the Isle of Man which is effectively the equivalent of Section 18 in England & Wales, being Section 12 (1) of the Conveyancing (Leases and Tenancies) Act 1954.

The key document is as follows:-

• Conveyancing (Leases and Tenancies) Act 1954.

Ireland

There is a statutory cap in Ireland which is effectively the equivalent of Section 18 in England & Wales, being Section 65 of the Landlord & Tenant (Amendment) Act 1980.

The key document is as follows:

• Dilapidations - Guidance Note to Best Practice (by the Society of Chartered Surveyors in Ireland).

Northern Ireland

Similar to Scotland, there is no statutory cap for damages in dilapidations cases in Northern Ireland.