Commercial Landlord and Tenant Law: When Issues Become Contentious

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Jon Mowbray, partner and solicitor in the real estate disputes team at IBB Solicitors, discusses the assistance you can provide to a client in relation to their occupation of properties and commercial lease disputes. For information on commercial landlord and tenant law or litigation please visit our commerical property disputes page.

Q: What Assistance Can You Provide to Clients in Relation to Their Occupational Properties?

A: If we are instructed to act for a client on the grant of a new lease or the renewal of an existing lease, we will look to agree the form of lease so as to limit the risk to the client – whether that would be relation to their ability to exercise a break option in the lease, their ability to dispose of the property if it becomes surplus to requirements, limiting service charges and in relation to their repairing obligations both during and at the expiry of the lease.

However it is not possible to exclude all potential areas of a dispute. eg a client may have acquired a lease (eg from a coporate transaction) whose terms are far from ideal.

Q: What Issues Are Likely to Become Contentious?

A: Generally landlords are looking to get as much out of their properties as possible and against this tenants are under real pressure to reduce their occupational costs. In particular this manifests its self at the end of a lease in relation to a tenants repairing obligations.

While their is a court protocol, which deals with how such disputes should be dealt with, prior to court proceedings being issued, and while that protocol encourages landlord to focus on what their true loss is, we are seeing a number of inflated claims.

Q: How Can You Look to Reduce Such Dilapidation Claims?

A: Ideally we would look to work closely with the client’s other advisers, to come up with a strategy to challenge the claim. This will include reviewing what the client’s actual obligations are, considering what whether the landlords proposals are going beyond the tenants obligations, considering what the landlords intentions are in relation to the property eg, does he intend to carry out substantial refurbishments works which would render many of the repair works superfluous, also a consideration of what the hypothetical purchaser would consider important.

Q: Do Similar Issues Come Up When a Landlord is looking to carry out works and put the cost through the service charge?

Matters can become particularly contentious when a landlord is looking to major works through the service charge towards the end of the term. Understandably a tenant will be reluctant to fund these. It is also important to look at whether they have strictly complied with the service charge machinery.

Q: Is the exercise of a tenant’s break option still proving contentious?

Regrettably yes as landlords are undoubtedly keen to keep tenants locked in to their leases and would take advantage of any failure to properly comply with the service requirements for the notice, the form of the notice, and any conditions which need to be satisfied in order to effectively exercise it.

To find out more about our property dispute resolution service for both commercial and private clients, call us today on 01895 207988 or email propertydisputes@ibblaw.co.uk.

For information on related matters please visit the respective pages below:

Commercial property disputesCommercial rent and service charge arrearsDilapidations Claims and DisputesAdverse Possession ClaimsCommercial Development Disputes / Commercial property litigation