Insights from Asit Jansari, Consultant-Solicitor at AGR Law
In this article, Asit Jansari of AGR Law delves into the common challenges surrounding commercial lease disputes. He sheds light on the most common issues tenants and landlords face and shares practical strategies for effective resolution.
Commercial lease can be an area fraught with complications and conflicting perspectives often leading to disputes between landlords and tenants over the terms of a commercial lease agreement. These disagreements can arise from a variety of issues, including rent arrears, service charge disputes and dilapidations at the end of the lease term.
Common commercial lease disputes
Rent arrears: Landlords may initiate legal action to recover unpaid rent from tenants who have defaulted on their payment obligations. There are also possible methods of Commercial Rent Arrears Recovery (CRAR) in prescribed situations.
Service charge disputes: Disagreements can arise over the calculation and recovery of service charges, which are costs incurred by the landlord for maintaining the property and its common areas. These disputes often involve complex accounting and legal issues.
Dilapidations: At the end of a lease term, landlords may claim damages from tenants for failure to maintain the property in good condition. These claims can be significant, particularly for long-term leases or properties with substantial fit-out.
Factors contributing to commercial lease disputes
Several factors can contribute to commercial lease disputes:
Poor communication: A lack of effective communication between landlords and tenants can lead to misunderstandings and disputes.
Unclear or ambiguous lease terms: Poorly drafted or ambiguous lease terms can create confusion and disagreement. Good advice and assistance from the outset can often avoid this and is often much cheaper than disputes arising and litigation.
Changes in market conditions: Changes in the market, such as economic downturns or increased competition, can impact the business being run and whether they can continue to afford the lease.
Disagreements over repairs and maintenance: Disagreements over who is responsible for repairs and maintenance can lead to disputes, particularly in older properties or those with complex maintenance requirements.
Resolving commercial lease disputes
If costs have been attempted to be saved from the outset when entering into a commercial lease then disputes can become more complex and costly to resolve. It is advisable to seek good quality legal advice early on. A commercial property lawyer can help you understand your rights and obligations under the lease agreement and provide guidance on the best course of action.
Alternative Dispute Resolution (ADR)
Before resorting to litigation, exploring alternative dispute resolution (ADR) options like mediation and arbitration can be a more cost-effective and efficient way to resolve disputes. ADR can help parties reach a mutually agreeable solution and avoid the time and expense of litigation.
Litigation
If ADR fails then litigation may be necessary. Commercial lease litigation can be a lengthy and complex process, involving complex legal arguments and evidence. It is essential to have experienced legal representation to navigate the legal system effectively.
How can AGR Law help you?
Commercial lease litigation can have significant financial and reputational consequences for both landlords and tenants. To mitigate risks, it is crucial to have a clear and well-drafted lease agreement that addresses potential issues and allocates responsibilities clearly. By proactively addressing potential disputes and seeking legal advice when necessary, parties can minimise the likelihood of litigation and its associated costs.
If you are caught in a commercial lease dispute and do not know which way to turn, speak to AGR Law on 0116 340 0094, or email hello@agrlaw.co.uk to book an appointment. They will offer you advice and options to assist you to navigate your way out of trouble. You can also visit their website at agrlaw.co.uk
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