If the approach to run Visual Studio as an administrator (you know this is widely advised across the development forums) is not an option for you, then you can upgrade the Telerik.Web.UI.dll manually.
There is a very detailed article of how to perform a manual upgrade
You simply need to replace the assembly references with the new ones. Here is a list of steps that ensures a safe upgrade:
Backup your project (a simple copy to another folder is usually enough, and using a source control system makes this redundant).
Delete the old Telerik.Web.UI.* references from the project and close it. This includes the Skins and Design assemblies.
Open the Bin folder of your project in Windows Explorer and delete the old Telerik.Web.UI.* assemblies.
Copy the new assemblies from the new installation's Bin40 folder (for .NET 4.0; for .NET 3.5 you need Bin35; for .NET 4.5 you need Bin45). If you are using a hotfix, go to the folder where you unzipped it.
Paste the new assemblies in the Bin folder of your project in Windows Explorer.
Add references to the Telerik assemblies in the project in Visual Studio.
Make sure you have all the necessary web.config registrations
As with any ASP.NET Project, it is often helpful to clear the ASP Temporary files and the browser (see the Clean up after Visual Studio blog post).
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