March 01, 2011
Legal disputes between disgruntled commercial property landlords and their tenants increased by an astonishing 43% in 2009, according to figures obtained by legal information service Sweet amp; Maxwell.
According to the newest available data, in 2009 there were 40 disputes between landlords and tenants in the High Court in London, up from 28 in 2008, and experts have blamed the increase on the economic downturn.
As companies desperately try to slash their property overheads by shedding excess office and retail space, litigation has inevitably followed from disadvantaged property landlords.
Sweet amp; Maxwell explains that with property as the second biggest business cost (after staff costs) thousands of legal disputes flare up every year between landlords and tenants. However, most of these are settled by negotiation or arbitration.
“Disputes over service charges can be particularly acrimonious in the retail sector, because these charges, particularly for tenants in shopping centres, are often very high,” commented Sweet amp; Maxwell.
Other common triggers for disputes range from occupiers trying to sublet excess office space, to tenants reneging on their lease contracts.
“Even disputes over whether the service charge covers Christmas decorations in large out of town shopping centres have prompted legal action in the past,” added Sweet amp; Maxwell.
