Commercial landlord and tenant disputes are common. They range from disagreements about service charge to contested dilapidations claims running into tens of thousands of pounds. Here is how to approach them.
The Most Common Disputes
- Dilapidations. At lease end, landlords frequently serve a schedule of dilapidations — a claim for the cost of putting the property back into the repair condition required by the lease. These claims are often inflated and frequently disputed. The starting point is always the lease terms and any schedule of condition agreed at the start.
- Service charge disputes. Tenants dispute service charge items on the basis that they are unreasonable, outside the landlord's power under the lease, or not properly evidenced. Most commercial leases give tenants the right to inspect accounts and to certify items as unreasonable.
- Rent review disputes. Where a rent review is to open market value, landlord and tenant frequently disagree on the comparable evidence. Most leases provide for an independent expert or arbitrator to determine the rent if agreement cannot be reached.
- Disrepair. If the landlord is in breach of their repair obligations (for example, failing to maintain the structure in a multi-let building), the tenant can serve a notice requiring them to remedy the breach. If they do not, the tenant may have a claim for damages.
- Breach of quiet enjoyment. The landlord is obliged not to interfere with the tenant's quiet enjoyment of the property. Persistent interference — excessive construction works, failure to maintain common parts, harassment — can give rise to a claim.
Before You Escalate
- Read the lease carefully. Most disputes turn on what the lease actually says. Identify the relevant clause, consider whether the landlord is clearly in breach, and take advice on your legal position before you write any letters that might prejudice your position later.
- Keep records. Correspondence, invoices, photographs of disrepair, site visit notes — all of this is evidence.
- Consider whether the dispute is commercially worth pursuing. A dilapidations dispute over £5,000 in a lease you are about to exit may not be worth the cost and management time of formal proceedings.
Alternative Dispute Resolution
Many commercial lease disputes are resolved through negotiation or mediation rather than litigation. Mediation is quicker, cheaper, and less disruptive than court proceedings. A skilled mediator can often find a commercial solution — a contribution to costs, a reduced dilapidations payment, a revised service charge — that formal proceedings would not produce.
If the landlord is unreasonable, RICS provide an arbitration and independent expert determination service for rent review and service charge disputes. For dilapidations, the RICS Dilapidations Protocol governs how claims should be prepared and responded to, and compliance with it affects the costs of any subsequent litigation.
Bonsai Law resolves commercial landlord and tenant disputes for businesses across the UK — through negotiation, mediation, or litigation where necessary. The experience of resolving these disputes feeds straight back into how we draft.
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