Plan your exit when you fit in: dilapidations and office fit-out

A fit-out is designed for the day you move in. The lease also has something to say about the day you move out, and that is usually when the bill for it arrives.

At the end of a commercial lease, the landlord can usually claim for breaches of the tenant's obligations: repair, decoration, and removing alterations if the lease or licence requires it. That claim is what people mean by dilapidations. The details depend entirely on your lease and your licence to alter, so take advice from your solicitor or a building surveyor on your own position. What I can tell you is what makes the difference from the builder's side, and most of it happens before the fit-out starts.

Record what you were given

Before you take the floor, get its condition properly recorded. A schedule of condition is a written and photographic record of the premises at the start of the lease: ceilings, floors, walls, windows, toilets, and the state and working order of the building services you're taking on.

How much that record protects you depends on how the lease is worded, which is another question for your solicitor. Without one, though, you are relying on memory and a few phone photos when the conversation comes round, possibly many years later.

Do it before the fit-out starts. Once the partitions are up and the carpet is down, the original condition can't be photographed again.

The original condition of the floor is evidence. Once your fit-out is in, it's gone.

Know what you'll have to take out

Read the reinstatement wording in your lease and licence (there is more on licences in licence to alter: what tenants need before an office fit-out). Typically it says whether your alterations must come out at the end, or whether the landlord gets to choose at the time.

If there is a real chance that everything comes out, design for that from the start.

Designing a fit-out that comes out cleanly

None of this means a plainer fit-out. It means making choices that are easier to reverse.

Partitions. Demountable or system partitions come down far more cleanly than plasterboard on studs, and some can be reused. Where a room needs a partition taken up to the slab for sound, that's fine, but record it, because it will need making good.

Ceilings. Work with the landlord's ceiling grid rather than cutting it about. If tiles, light fittings or grilles are taken down, store them or record exactly what was there, so reinstatement means putting things back rather than buying them new.

Mechanical and electrical. Every fan coil moved, every grille added and every circuit altered should be on the as-built drawings at handover. Reinstating M&E without a record of what changed is slow and expensive.

Floors. Use floor boxes that fit the existing raised floor, and carpet tiles rather than glued-down finishes where the specification allows. Be wary of anything bonded or fixed into the landlord's floor.

Joinery. Design feature joinery to be unbolted rather than demolished. Good joinery can sometimes come with you.

Free-standing over built-in. Booths, pods and furniture that stand on their own leave nothing behind. Our sister company SiloPod specialises in acoustic office pods.

Keep the paperwork together

The handover pack from your fit-out matters more at the end of the lease than at the start. Keep the as-built drawings, the operation and maintenance manuals, the certificates, the licence to alter and the schedule of condition in one place, somewhere that survives an office move and a change of office manager.

When the lease is ending

If the end of the lease is coming up, take advice early. A surveyor can tell you what the landlord is likely to claim for, and a contractor can price what the reinstatement would actually involve. We price end-of-lease strip-out and reinstatement as well as fit-out.

Send us the lease plan, the licence drawings and photos of the floor as it is now, and you'll get a clear scope and price for putting it back. If you're at the start rather than the end, send us your proposed layout and we'll point out anything that will be hard to take out later. Our rates are on the cost guide, and our Cat A and Cat B fit-out page covers both ends of the job.