Commercial lease disputes

Commercial lease disputes can arise when a landlord or a tenant breaches one or more covenants in a commercial lease. Whether you are a landlord or a tenant, seeking our advice early means disputes can usually be resolved quickly, saving you time and money.

What are a landlord’s responsibilities?

Most commercial leases are ‘fully repairing and insuring’ (FRI). This means that the Tenant is responsible for most of the maintenance and repairs costs, plus the cost of buildings insurance.

However, a landlord still has responsibilities under the law and in the commercial lease agreement, they have signed with the Tenant.

By law, a landlord is responsible for:

Under Section 11 of the Landlord and Tenant Act 1985, a commercial landlord is partially responsible for maintaining common areas of a property and the exterior of the property, including wiring and other health and safety aspects. The exception is when a tenant is the sole occupant of a property.

When a landlord does not meet their responsibilities under the law or as specified in the commercial lease agreement, a tenant can take legal action against them. A tenant may also be able to claim compensation for any financial losses and personal injury.

What happens if a commercial landlord sells their property?

When a landlord sells a commercial property, the new owner will inherit the tenant and the existing lease agreement. The new owner of the property will become the landlord.

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How might a tenant breach a commercial lease?

Examples of ways a tenant might breach a commercial lease agreement include:

  • Failing to maintain, repair or insure a property as specified in the Lease.
  • Making alterations to the property without permission from the landlord.
  • Sharing or subletting the property without the landlord’s permission.
  • Assigning a lease without the landlord’s permission.

How can a landlord deal with difficult commercial tenants?

If a tenant breaches the terms of a lease agreement, a landlord may claim possession of their property with a Section 146 notice. This is known as ‘forfeiture’.

When a tenant has failed to pay rent, the forfeiture process does not have to be followed. A landlord can simply enter the premises after a specified period and change the locks. However, if you are a landlord considering this route, it is important to seek advice from a solicitor as this action is risky, and there can be legal consequences.

Where a Section 146 notice is served, a tenant will be given a reasonable time period to put the breach right and pay any compensation due to the landlord. If the tenant fails to remedy the breach, then the landlord can start eviction proceedings through court.

How long does it take to evict a commercial tenant?

The length of time it takes to evict a commercial tenant depends upon the route taken. If locks are changed, it can take just days. If the matter goes to court, it can take several months.

What are a tenant’s rights under forfeiture?

Tenants have the right to apply for ‘relief from forfeiture’ if forfeiture should not have taken place. In this case, they may also be able to claim compensation from the landlord. The aim of compensation is to put the tenant back into the position they would have been in if forfeiture had not happened.

They can, in some cases, also apply for relief from forfeiture if they have remedied the breach.

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Commercial lease dispute resolution

Disputes about commercial leases can be complex, time-consuming and expensive. Our experienced solicitors can help you to explore fast, cost-effective solutions to minimise the impact on your business.

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