Commercial Property Litigation and Dispute Solicitors

Types of commercial property disputes

Some of the most common sources of commercial property disputes include:

Breach of covenant

A covenant is a written agreement contained within the deed of a property or land. It sets out how both parties act within a lease agreement, for example;

• How much rent to pay
• To keep the property insured
• Not to alter the premises
• To keep the property in good repair, and
• Not to assign or sub-let

Disputes occur when one party to a lease fails to comply with, or acts outside of the covenant.

If you have suffered a loss as the result of breach of covenant, you may be able to claim damages.

Lease disputes

Lease disputes cover a wide range of issues between a landlord and tenant.
A dispute could arise;

• During the initial negotiation of a lease
• During the term of a lease, or
• On termination of a lease

Examples of lease disputes include;

• Attempts to exercise a break clause
• Rent reviews
• Service charges
• Failing to carry our repairs
• The payment of rent
• Sub-letting
• Renewing a lease

It’s not always the tenant that’s in breach. A lease should also include covenants that the landlord must adhere to.

Rent and service charge recovery

This is one of the most common areas of dispute between commercial landlords and tenants. Especially in a tough economic climate.

If you’re a landlord, it’s often better to have a tenant in arrears than a vacant premises. There are steps a landlord (or their management company) can take against a non-paying tenant.. These include;

• Drawing on a rent deposit
• Recovering rent recovery from a sub tenant (if applicable)
• Forfeiture of the lease
• Instructing a bailiff
• Insolvency

If you’re a tenant and you’re in arrears, you should speak to your landlord and try to come to an agreement.

Regardless of whether you’re a landlord or tenant, you should seek legal advice as soon as possible.

Insolvency

A tenant’s insolvency can have a huge impact on the landlord of a commercial property.
As such, it’s important that landlords seek legal advice as soon as they see any signs of a tenants insolvency. These signs include;

• Late or sporadic rent payments
• Signs or suggestions of restructuring, and/or
• The ceasing of trading

Insolvency is a huge area of law that covers receivership, administration, compulsory and voluntary liquidation and bankruptcy.

Each have different consequences on the actions a landlord can take, like;

• The recovery of rent arrears
• Issuing court proceedings, or
• Serving a statutory demand for the forfeiture of a lease

Insolvency is complex so it’s important to get legal advice as soon as possible to protect your interests.

Dilapidation claims

Dilapidations are breaches of repair covenants that are written into a building lease. A breach could be anything from a broken window to a leaking roof.

There are two types of dilapidations;

1. Term dilapidations – these occur during the term of a lease
2. Terminal dilapidations – the occur when the lease comes to an end

When dilapidation disputes arise, they can cause contention between landlord and tenant. This area of law can be very complex and there can be serious financial implications. If you’re considering making a claim, or your tenant is making a claim against you, it’s important to get legal advice.

Forfeiture and possession

Forfeiture is a way for a landlord to bring a lease to an end and regain possession of the property if the tenant is in breach of the covenant.

This means the landlord can use the premises as they see fit. For example, re-let it to a tenant who will more likely comply with the lease covenants.

However, an unlawful forfeiture could result in the tenant bringing about a damages claim against the landlord. As such, it’s very important to seek legal advice.

Lease renewal and security of tenure

Disputes between commercial landlords and tenants often occur in the run-up to a lease coming to an end.

Especially if they can’t agree on terms, or if one side wants to terminate the lease or secure their tenure.

There are strict criteria on who, when and how to service lease renewals. So it’s important to seek legal advice.

Why choose Rothera Bray?

Our commercial property litigation lawyers have significant experience.

We take the time to get to know you and understand your business and your relationship with your tenants. This helps us to spot problems in advance and help to minimise risk.

We work hard to get the best possible outcome quickly and efficiently, without resorting to court proceedings. If your case does go to court, our landlord solicitors have the experience to get the best possible outcome.