Commercial Property Disputes: Common Issues and Resolution

commercial property disputes

What are commercial property disputes?

Commercial property disputes refer to legal conflicts that arise in relation to commercial real estate. These types of disputes often involve various parties, such as landlords, tenants, commercial property owners, developers, investors, and other stakeholders in commercial real estate transactions.

The main causes of commercial property disputes can be diverse and may include disagreements over contracts, lease agreements, property boundaries, rent arrears and environmental issues, to name a few.

Causes of commercial property disputes

Commercial property disputes may involve a wide range of issues. Some common commercial property disputes include:

  • Commercial lease disputes: Lease disputes involve disagreements between commercial landlords and tenants over a number of issues. These may include rent reviews, lease renewals, repairs and maintenance responsibilities, service charges, and breaches of lease terms.
  • Forfeiture: Forfeiture occurs when a landlord seeks to terminate a lease due to a tenant’s breach of lease conditions, such as non-payment of rent or other violations.
  • Disrepair: Disputes may arise over the state of repair of the property at the end of the lease term, with landlords seeking compensation for any damage beyond normal wear and tear.
  • Break clauses: Issues may arise when either party seeks to exercise or dispute a break clause allowing early termination of the lease.
  • Rent arrears: Disputes related to unpaid rent, interest, or service charges owed by the tenant.
  • Landlord and Tenant Act 1954 renewal proceedings: These involve disputes regarding the renewal of leases under the protection of the Landlord and Tenant Act 1954, which grants certain rights to commercial tenants to renew their leases.
  • Boundary disputes: Boundary disputes are common and involve conflicts over the boundaries and ownership of commercial properties.
  • Planning and development disputes: Challenges may arise in relation to planning permissions, changes of land use, or objections to proposed developments.
  • Restrictive covenants: Disputes may also arise over restrictions on the use or development of land due to restrictive covenants. Restrictive covenants are often found in property deeds.
  • Professional negligence: Professional negligence claims may be made against surveyors, solicitors, or other professionals involved in commercial property transactions for negligence or breach of duty.
  • Rights of way and easements: Disputes commonly arise in relation to access rights, easements, or other rights affecting the use of a property.

 

Resolving a dispute

Resolving commercial property disputes may involve commercial property litigation, alternative dispute resolution methods such as mediation or arbitration, or negotiations between the parties.

Parties should seek legal advice from a commercial property dispute resolution solicitor to help them decide which method is best for their circumstances.

Resolving a commercial property dispute through the Courts in England and Wales involves a structured legal process.

Pre-action Protocol:

Before initiating court proceedings, parties are often required to follow pre-action protocols. These are specific procedures that encourage early communication and the exchange of information to resolve the dispute without going to court.

Letter Before Action:

The claimant usually sends a formal “Letter Before Action” or “Letter of Claim” to the proposed defendant in the case. This letter outlines the details of the dispute, the legal basis of the claim, and the desired resolution.

Issuing a claim through the courts:

If a resolution is not achieved through pre-action protocols, the claimant can initiate court proceedings by issuing a claim at the relevant court. The claim form specifies the details of the claim, the remedy sought, and the legal basis for the claim.

Acknowledgment of Service:

The defendant must acknowledge the service of the claim within a specific period of time. This typically allows them more time to prepare a full response.

Defence and counterclaim:

The defendant may wish to file a formal defence, responding to the allegations in the claim. They may also wish to submit a counterclaim if they have claims of their own against the claimant.

Case Management Conference (CMC):

The court may schedule a CMC to discuss the case, set timelines, and explore the possibility of settlement. The court may also give directions on the exchange of evidence and other procedural matters.

Exchange of evidence:

Both parties will be required to exchange relevant documentary evidence to support their case at this stage (known as the ‘disclosure’ process). The duty of disclosure is strict and if a document is relevant, it must usually be disclosed to the other party regardless of whether it is helpful or harmful to the disclosing party’s case. Witness statements and expert reports are also exchanged.

Pre-trial Review:

The court may hold a pre-trial review to ensure that the case is ready for trial. The judge is likely to provide directions for the trial, including the list of issues to be addressed.

Trial:

If a settlement cannot be reached beforehand, the case goes to trial. At this stage, both parties present their evidence, examine witnesses, and make legal arguments. The judge makes a decision based on the evidence presented. The court will then issue a judgment determining the outcome of the case.

The judgment may include orders for specific performance, damages, or other remedies.

Parties dissatisfied with the judgment may have the right to appeal to a higher court, but this is subject to specific legal criteria.

 

ADR for commercial property dispute resolution

 

Our commercial property dispute team will help you resolve the dispute in the quickest and most cost-effective way by exploring the possibility of Alternative Dispute Resolution (ADR).

Taking legal action through the Courts can be costly and time consuming. ADR involves a range of resolution types from negotiation, mediation, or arbitration, potentially without the need to enter court proceedings. A large proportion of disputes can be settled using negotiation or mediation.

The aim of ADR is to help our clients achieve their commercial objectives in the most efficient way and to ensure that future disputes are avoided.

In many cases, a combination of methods may be required to achieve the best resolution to a commercial property dispute.

When commercial property disputes arise, it is important to seek assistance from a professional who has an informed understanding of legal issues and experience in providing solutions and negotiating satisfactory settlements.

It may be that litigation cannot be avoided; therefore, we can help you to bring or defend a property dispute claim in the civil courts or through the tribunals.

The role of a solicitor

Commercial property dispute solicitors carry out a range of tasks on their clients’ behalf which goes beyond providing legal advice, such as:

  • Drafting any necessary statements of case, witness statements or applications
  • Exchanging information with the other party as part of the disclosure process
  • Choosing a strategy to use in court based on the information their client provides
  • Presenting the case in the courtroom via a barrister
  • Negotiating with the opposing party during the settlement phase of the case
  • Appealing your case if a decision goes against you.

How can South Bank Legal assist?

Our property dispute solicitors cover all types of property and real estate disputes. We can provide legal advice to both individuals and businesses.

South Bank Legal Solicitors is a dispute resolution law firm based in London with the ability to assist clients nationwide. The firm has several litigation solicitors who each have over 20 years of experience.

Our commercial property dispute solicitors provide timely and cost effective legal advice and representation to our clients.

For a confidential discussion with our expert team at South Bank Legal, contact us using the form below, or call 02035765179.

 

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