5 Essential Tips for GPs to Manage Lease Dilapidations

Surgery premises tend to be the most valuable and costly asset held by GPs. However, as of 2022, more than half of GP premises were not owned by the GPs themselves (source). Nearly all GP leases will place responsibility for at least some repairs on the GP tenant, and very often the practice will be responsible for all repairs and maintenance, despite not owning the building. If a practice does not keep up with those maintenance obligations, it may face a claim at the end of its lease from the landlord. It is therefore sensible to consider the extent of your repairing obligations as much as advance as possible. This article outlines five practical tips to help plan for, and limit, your exposure to a dilapidations claim:

Tip 1 – Plan ahead

In good time before the expiry of your lease, you should consider your leasehold obligations of repair, decoration and reinstatement required at lease end.

Find all documents supplemental to the lease, such as licences to alter, deeds of variation and schedules of condition. They could contain important information affecting your repair and reinstatement liability.

Ideally you should be regularly setting aside funds for repairs so that the costs are, as far as possible, spread out over the term of the lease.  This is particularly important for GPs where partners are likely to come and go throughout the term of the lease and the absence of a repair fund may impact badly on succession planning.  If your lease is on full repairing terms, your NHS premises funding should include funding towards the costs of external and structural repairs which ideally should be set aside rather than distributed as part of partner profit shares.

When the lease is approaching expiry, think about whether you want to stay on at the premises. This should mean that your dilapidations liability will not crystallise at the expiry of your existing lease; instead, it is normally carried over into your new lease (but bear in mind that a landlord can still require you to remedy wants of repair during the life of a lease!)

Tip 2 – DIY?

Think about whether you want to arrange for repairs yourself, which has pros and cons.

An advantage is that you would have control over the spend – but (on the flipside) you may end up doing works that the landlord would not have required or which do not impact on the value of a claim for dilapidations.

If you want to do the works, consider instructing a surveyor to advise on what items should be fixed and how.

It is worth bearing in mind that after the lease has expired, it is not as easy to gain access to the premises: your landlord will need to grant you a licence to occupy.

Tip 3 – Find out your landlord’s intentions

What does your landlord want to do with the premises after your lease has ended? If the landlord has plans to redevelop the premises into an alternative use, this could have a big impact of the value of its claim due to the legal principle of supersession. Look for any legal notices or planning applications made by the landlord and consider speaking to local agents to find out whether the property is likely to be most valuable if redeveloped.

Consider whether you can do a deal with the landlord. They might be willing to settle your dilapidations liability at an early point (which gives you a fixed liability and avoids incurring further costs – but there is always a risk that you end up over-paying).

Tip 4 – Stay quiet?

Your lease may provide that the landlord must serve its schedule of dilapidations within a specified time frame after expiry of the lease. A notice to trigger your reinstatement liability might need to be served prior to lease expiry. If so, it might be best if you do not communicate with the landlord about any dilapidations matters until after the relevant deadlines have passed – as the landlord might then be out of time to bring a claim for dilapidations.

Tip 5 – Steps after lease expiry

When the lease expires, arrange for a schedule of condition with detailed photographs to be prepared (we would advise that a professional prepares it for you) as you may need to prove the state and condition in which you returned the premises to your landlord.

Once the landlord has served its schedule of dilapidations, you should consider instructing lawyers and a building surveyor. The surveyor would consider the landlord’s schedule from your point of view as tenant. The figures are often artificially high. Landlords frequently try to ‘improve’ their assets by adding in items such as new carpets and windows and even replacement boilers when the existing items are not beyond their useful life. Sometimes we find items which are not the tenant’s responsibility added into the schedule.

You should consider obtaining expert valuation advice on the effect of the disrepair on the value of the landlord’s reversion under a particular statutory provision often applied to dilapidations claims: section 18 of the Landlord and Tenant Act 1927. You may find that the diminution in the value of the landlord’s reversion is significantly less than the cost of the works. In some scenarios, your financial liability could be reduced to zero.

Finally, consider whether you can pass any of the financial liability onto third parties, such as any undertenants at the premises.

As this article highlights, there are lots of things to consider in relation to your dilapidations liability at the end of your lease and every situation is different. It is sensible to consider these issues early and essential to involve professionals at the right time, to save you stress and potentially money.

First published in GP Business, May 2025.

Stephanie Trompeter is an associate in our corporate commercial team. If you have any questions about any of the issues covered in this article, or need legal advice, please get in touch with the team today.