Dilapidations are becoming increasingly important, as Ls try to squeeze as much as they can out of departing Ts. In response, many Ts could be making more use of the laws on improvements (and the obligation of L to compensate T for improvements carried out before the last three years of the term).

To make a compensation claim, it is essential that T follows the improvements procedure set out in Part 1 LTA 1927. T must serve L notice of its intention to make improvements, together with specification and plan. L can then respond by offering to carry out the improvements in return for a reasonable increase of rent, should it wish to do so (this will then prevent any compensation claim – if T decides then it does not want the works done it can withdraw the claim). If no objection is made by L within the three-month period, T can carry out the works, irrespective of any clauses in the lease to the contrary. If T completes the improvements within the time agreed (or ordered by the court), then T will be entitled to compensation provided the claim for compensation is made in time (generally within three months of the end of the tenancy).

An article in Property Law Journal suggests that this is potentially a useful weapon against an anticipated dilapidations claim. If T thinks that L will make a large claim against T for want of repair at the end of the lease, then it may be possible for T to apply to carry out improvements to the areas in need of repair, so that T does the work but L ends up having to compensate T. In effect, the improvements can override the repairing obligation. Whether such a ploy would be workable in many instances must be open to serious doubt, but it is worth being aware of this potential for mischief. However, do not forget that the improvements must be carried before the last three years of the term.

One final point worth emphasising about improvements under LTA 1927 is that they override any provision to the contrary in the lease (ie the parties cannot contract out). In practice, many leases say that L’s consent is needed for improvements and that will often wrongly lead Ts to believe they cannot carry out improvements as of right. Plus, of course, if the improvements are completed before the last three years of term, T may well be entitled to compensation. See [2010] 246 PLJ 22.