Lease Disputes Between Commercial Property Landlords and Tenants
For many businesses, leasing a property from a commercial landlord is a convenient, practical way to operate. However, at any stage of the leasehold period, disputes can arise over the terms of the lease between tenant and landlord.
Unless they are dealt with properly, such disputes can escalate with significant consequences. The right advice and actions taken at the right time can diffuse the situation, saving time, money, and professional relationships.
At Lupton Fawcett, we assist landlords and tenants who face a wide range of lease disputes, from disagreements over rent payments or service charges, to issues concerning the termination of a lease.
Speak to one of our expert Commercial Property Dispute Solicitors for advice as soon as possible – the earlier action is taken, the more likely a swift resolution will be found.
What is a commercial lease dispute?
Commercial lease disputes can vary greatly, as the term broadly covers any disagreement between landlord and tenant over the terms of the lease.
A lease is the contract between the tenant and the landlord, setting out the length of time the tenant can have the use of the property, the price of the rent, any other charges to be paid, and the responsibility and expectations of both parties. It’s crucial that both parties take legal advice before signing a commercial lease to ensure that the terms are appropriate and that they fully understand their obligations. When one party is unaware of, or misinterprets an aspect of the lease, breaches can occur leading to disputes with the potential to negatively impact one or both businesses.
Disputes can arise at the start of a lease, with either party disagreeing on the proposed terms, at any stage during the lease, and most commonly, at the termination of a lease, when issues may arise over the state of the property or any outstanding charges to be paid. The most common grounds for dispute include:
- Lease renewals
- Dilapidations, or the state of repair of the building
- Issues with rent or service charges.
Why do lease disputes arise?
Lease disputes commonly occur when a clause has been misinterpreted by either the tenant or the landlord, and either or both parties may have breached the terms of the lease as a result. There may have been a breach, or a dispute in relation to the maintenance of a property, with either party assuming that the responsibility for the repair or maintenance lies with the other.
There are often disputes over service charges or payment of rent, alterations made to the property or issues over sub-letting the premises, to mention but a few examples. It is important to identify where a breach has been made, so that liability can be assigned, and so that both parties understand what remedies are available given the circumstances.
This can be a complex area of law, and it is important to take expert legal advice to ensure that every relevant aspect of the lease is taken into consideration and that both landlord and tenant understand their rights and obligations. Disputes, if allowed to escalate, can be inconvenient, time consuming and costly – so if you find yourself facing a lease dispute, contact us as soon as you can.
How are lease disputes resolved?
Where a landlord and tenant are unable to amicably resolve their dispute, they run the risk of ending up in court, with both parties running up legal bills and potentially damaging a previously cordial working relationship.
It is always preferable to attempt to resolve your dispute through negotiation. If it is possible to open lines of communication between both parties, it may be possible to reach a mutual agreement that is satisfactory to both sides. There may be some degree of compromise required in order to reach a workable solution, but a little compromise at this stage may save stress, valuable time and money down the line.
Your Lease Disputes Solicitor will be able to establish which party is contractually required to meet an obligation or responsibility in line with the lease, and having clarified the cause of the dispute, they may be able to act as a mediator between landlord and tenant. Our aim is always to attempt to resolve the situation, keeping the matter out of court wherever possible.
Of course, whilst amicable resolution reached between tenant and landlord is the ideal outcome, sadly it isn’t always possible or realistic. If your alternative dispute resolution has failed, it may be time to take formal proceedings.
Resolving disputes – landlords
There are many reasons that a lease dispute may arise, and the remedies available will depend on the details specific to your lease agreement and situation, so it’s always best to take legal advice before embarking on any particular course of action. However, as a landlord, if you are having issues with a tenant who has breached their lease agreement, and you are unable to reach a resolution directly with them, the next step may be to issue a section 146 notice.
A section 146 notice can be served where a lease has been breached (under the Law and Property Act 1925) and can begin the process of forfeiture proceedings, or the termination of the lease. The notice will state the breach that has occurred, and require the tenant to remedy the breach, or to provide compensation to the landlord for failing to remedy the breach. A tenant, when served with a section 146 notice will often attempt to remedy the situation, realising that the consequences of failing to do so at this stage may be significant.
Resolving disputes – tenants
If, as a tenant, you are struggling with a landlord who isn’t meeting their obligations to you under the terms of your lease, it is crucial that you keep an ongoing log of every communication that you have had with the landlord when reporting the breach. Even if they are not responding to you, it is important to show that you have repeatedly made them aware of the situation. It’s also important to document any losses caused to you as a result of the breach, so that if the case ultimately ends up in court you are able to claim for damages.
Why choose Lupton Fawcett?
No one enters into a commercial lease expecting disputes to arise. However, if you find yourself disputing the terms of your lease, we will work with you to resolve matters as efficiently and cost effectively as possible. We advise both landlords and tenants on all aspects of commercial property law; we can work with you to identify your objectives and business priorities, whether that be the termination of a lease, the negotiation of a settlement, or the initiation of court proceedings. Between us, we will establish the options available to you, and will guide you through the process of resolving your dispute as swiftly and as satisfactorily as we can.
It is also a good idea to review the terms of your leases regularly; ensuring that they are still relevant and fit for purpose is crucial for the best interests of your business. If you need advice on the terms of your lease, or if you want to talk to us about any potential issues or disputes, please contact us today for an initial consultation, and let us show you how we can help.
We provide a personalised service, with sector specialists and extensive resources to ensure we are giving you the best solutions to your problems.
Our Commercial Property Disputes Solicitors act regularly for clients across the United Kingdom including Bradford, Birmingham, Hull, Leeds, Liverpool, London, Manchester, Sheffield, York and Nottingham. We can support your needs wherever you live in England, Wales & Northern Ireland.
For a no obligation initial consultation please either call the office or leave your details using the contact form at the top of this page. We’ll be happy to help.