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Make an enquiry Conflict resolution with a commercial mindset
Our Real estate disputes team works closely with property owners, investors, developers, funders and both landlords and tenants, supporting them with their day-to-day legal requirements and their more complex issues. We integrate with you or your team, gaining an in-depth knowledge of your business so we can provide uniquely tailored advice which delivers results.
When a dispute arises, wherever possible, we strive to achieve an early resolution. However, when resolution is not possible, we work with you to develop a pragmatic strategy which will align with your commercial interests and achieve the best possible outcome. Our team has the expertise to make sense of and resolve extremely complex disputes.
We are familiar with all forums for real estate disputes ranging from early enteral evaluation, mediation, arbitrations, and the court and tribunal systems.
We advise on:
- Service charge disputes
- Breaches of contract
- Commercial, residential and mixed-use schemes
- Development disputes
- Dilapidations claims
- Insolvencies
- Landlord and Tenant issues including rent arrears, covenant enforcement, forfeiture and business lease renewals
- All forms of leasehold enfranchisement applications
- Planning
- Party wall disputes
- Possession of land claims
- Professional negligence in real estate issues
- Rights of light claims
Make an enquiry Property Litigation
Whether you are buying, selling, developing, leasing or using land or property, our property litigation experts can support you with any issue that crops up. We represent clients of all sizes, including investors, developers, corporate occupiers, national retailers, owner-managed businesses and property management companies. Our team handles everything from high-value complex disputes to the day-to-day management of property portfolios.
What is property litigation?
Property litigation deals with disputes relating to real estate. Much of our work is concerned with resolving disputes between landlords and tenants, but anything that impacts the ownership, use and and occupation of property will come under the property litigation umbrella. Here are some examples:
- Disputes relating to site assembly, such as diverting easements
- Rights to light
- Option agreements
- Business lease renewals
- Dilapidations claims
- Collecting rent arrears
- Service charge disputes
- Exercising break options
- Removing unlawful occupiers and travellers
- Tenant insolvency
- Disputes over breaches of covenant including forfeiture
At Collyer Bristow, we tend to use the term ‘property dispute resolution’ instead of property litigation. That’s because the word ‘litigation’ refers specifically to the court system, whereas we can usually resolve disputes using alternative methods like negotiation, mediation or arbitration. This tends to be faster and less expensive than settling matters in court.
Who needs property litigation?
Anyone who owns or occupies, or is looking to own or occupy, a commercial property of any kind can benefit from property dispute resolution services at some point in the process. This is largely because the real estate market is so complex and regulations are constantly changing. Even the most seasoned investors can struggle to keep up, preferring to lean on the knowledge of a specialist legal team.
What can our property litigation solicitors do for you?
At the first sign of trouble, our experienced team is on hand to evaluate the situation. We can then figure out a proportionate strategy for resolving the matter in a way that satisfies everyone with minimum disruption to normal activities. Relationships between landlords and tenants, developers and investors and so on tend to be long-lasting and synergistic. The last thing we want to do is go in all guns blazing and create more problems than we solve.
Our collaborative, creative approach to property dispute resolution could include negotiating settlements, holding mediation meetings, getting an early neutral evaluation and more. We can also provide clarity for businesses that do not have a live dispute but want a legal specialist to run through processes or what-if scenarios, such as what happens if a tenant does not pay rent. Talk to us about your needs.
Make an enquiry Landlord and Tenant Disputes
Disputes between property owners and tenants need fast and effective resolution to prevent damaging consequences for both parties, such as loss of trade for tenants or void periods and lost revenue for landlords. We focus on providing early common-sense assistance to stop problems before they cost you more time and money.
When might I need landlord and tenant solicitors?
Disputes between landlords and tenants are relatively common and most will need some degree of legal support. The main issues we deal with include:
- Rent arrears and service charge arrears – chasing a tenant for late payments can be very time consuming, especially if the tenant has financial problems or is withholding payment due to something the landlord has or has not done.
- Rent review disputes –while most rent review disputes are settled by negotiation between surveyors, there may be disputes over the wording of the rent review clause or a technical area of law.
- Repair and dilapidations – we can help make sure that tenants leave the property in the right state of repair at the end of lease, and that landlords are not asking for too much work to be done.
- Assignments, subletting and change of use – we can ensure that the correct permissions are given, pre-conditions are satisfied, and the new occupier has the financial and trading strength to perform the obligations under the lease.
- Break clauses – lease breaks have historically resulted in a large amount of litigation and are a minefield that need specialist legal advice.
Do landlord and tenant disputes always end up in court?
There are many ways to resolve a landlord and tenant dispute that don’t involve the court. We can help you choose a tactic that closes the dispute down effectively before it spirals out of control.
For most disputes, the starting point is to talk it out. We can often nip problems in the bud through negotiation and compromise. Where that’s not possible, we might recommend the use of mediation or arbitration to help you exit the dispute.
Litigation is the final option. Collyer Bristow will always fight your corner in court, but our proactive and creative approach to disputes reduces the chances of you having to take this step.
Why choose Collyer Bristow as your landlord-tenant dispute solicitor?
Clients work with us because we’re fast and responsive, and we always look for a business-orientated solution to save you time, stress and money. As well as assisting with active disputes, our solicitors fulfill an advisory role in portfolio management, offering solid operational advice on everything from break clauses and contested lease renewals to dealing with insolvent tenants. For more information, give us a call today.
- What is the difference between landlord solicitors and tenant solicitors?
- How much notice does a landlord need to give a tenant to move out of a property?
- Who is responsible for paying council tax? The landlord or tenant?
- Under what circumstances can a landlord evict a tenant?
- What are a landlord’s rights if the tenant breaks the terms of a lease?
Make an enquiry Complex Disputes
Property disputes are, by their nature, complex. However, some are more high stakes, high profile and high value than others. At Collyer Bristow, our specialist property dispute team has a track record of handling some of the most significant and complex real estate disputes in the country.
What is a complex real estate dispute?
Some real estate disputes are labelled as complex. This usually occurs where the case involves:
- Multiple parties, such as landowners, developers, contractors, local authorities and funders
- Multiple venues, such as simultaneous litigation in several different jurisdictions
- Large amounts of money
- Technical issues that require the assistance of legal, financial, lending, insurance, tax and valuation specialists
- Facts that are out of the ordinary, where there may not be a clear legal answer
- The possibility of a lengthy trial
Do complex real estate disputes have to go to court?
Complex real estate disputes are complicated, hence the name, and it’s fair to say that a dispute gains more complexity when the number of factors involved grows. However, they do not necessarily have to go to court.
If you find yourself caught up in a complex property matter, it would be wise to seek legal help at the earliest opportunity. We can help you weigh up whether some form of alternative dispute resolution would be more suitable than litigation. Arbitration can be particularly helpful in complex property disputes since it allows for confidentiality. Plus, challenges to arbitral awards are infrequent, which puts an end to long-winded appeals processes through the courts.
Why choose Collyer Bristow for your complex property dispute?
Complex disputes have a unique set of risks and opportunities, and the outcome may be uncertain. We aim to minimise the risk by explaining all your options and helping you make informed choices. Our focus is helping you avoid unnecessary litigation exposure but, when litigation is the best option, we draw on decades of experience from the highest level to develop the right strategy for court.
Managing risk is an essential aspect of complex real estate cases, and this extends to costs.
A hallmark of our approach is to evaluate early exit options such as settlement or summary judgment, as well as budgeting solutions to ensure that litigation costs don’t become a blocker for meeting your commercial goals.
Make an enquiry Early Neutral Evaluation
Early Neutral Evaluation (ENE) is a form of alternative dispute resolution in which an independent party is appointed to evaluate the case and give a preliminary view on its merits. The purpose of ENE is to give you a realistic idea of the strengths and weaknesses of your case. You can use this information as a basis for settlement negotiations. It can also help you decide whether it’s worth taking the dispute to court.
How does early neutral evaluation work?
With ENE, an impartial third party is appointed to look at the evidence, hear submissions from the parties, and state their opinion on the likely outcome of the dispute at trial. The evaluator is usually a QC, judge or retired judge.
The evaluator’s opinion is not binding and the process is usually ‘without prejudice,’ meaning things that are said in the ENE proceedings are hidden from the court. However, it can be incredibly helpful as a springboard for settlement negotiations and to help the parties avoid potentially risky lititgation.
What are the advantages and disadvantages of early neutral evaluation?
Advantages:
- Ability to discuss competing positions in an open forum
- Helps narrow the issues so you can focus on the things that matter
- Faster and less formal than arbitration or litigation
- Gives a quick reality check to help you identify gaps and weaknesses in your case
Disadvantages:
- The evaluator does not usually hear witnesses as they would in a trial
- Too simple for complex factual disputes
- One party may become more fixed in their position if an evaluation is made in their favour
Is early neutral evaluation binding?
No, early neutral evaluation is a non-binding form of alternative dispute resolution that can help both sides avoid getting involved in litigation.
How can we help with early neutral evaluation?
It’s always important before embarking on ENE to get specialist legal advice. All parties must agree to ENE, and to the identity of the evaluator. This is something that our skilled team of property dispute resolution solicitors can help you with.
We’ll also help you decide whether ENE is the right tool for you, either as a standalone alternative to litigation or to complement mediation and the negotiation process. If an agreement is reached, we can draft the paperwork to settle the agreement and bring the matter to a swift resolution.
Make an enquiry Service Charge Disputes
Service charges are a fact of life for many commercial tenants. The money goes towards the day-to-day running costs of their building and is used to cover items such as repair, cleaning, insurance, security and management fees. When disputes arise, it’s usually because the tenant disagrees with the quality or proportionality of the services being provided, or the amount payable.
Our expert service charge solicitors provide both legal and commercial advice to resolve service charge disputes with the minimum fuss.
What rules regulate commercial property service charges?
There are no laws to regulate commercial service charges. This means that in any dispute, the terms of the lease will regulate how the service charge is managed.
However, in 2019, the Royal Institute of Chartered Surveyors introduced a professional statement called the RICS Service Charges in Commercial Property (1st edition). This document provides clear guidance for landlords and tenants about how service charges should be calculated. For example, it wasn’t at all clear who should pay for marketing events held in a shopping centre. Now there’s clear guidance that says the landlord should contribute half the cost of such events from their own money.
The RICS standards protect businesses from a lot of hidden costs and, along with the lease, are the starting point in any service charge dispute.
What are some common service charge disputes?
Fundamentally, a service charge dispute will revolve around the questions – was the service charge reasonable? Did the landlord account for the expense properly? These questions might arise in a number of situations, including:
- The cost of specific services
- How liability is calculated and divvied up between tenants
- Substandard work or service provision
- Hefty managing agent’s fees
- Disputes over certifying the service charge
- Recovery of major capital works
- Quantum and use of the sinking fund
- Year-on-year service charge increases
- Recovering service charge arrears from tenants
Service charges can only be charged for services set out in the lease. As such, any dispute will usually start with a scrutiny of the service charge accounts for items not covered by the lease and challenged where necessary.
How can our service charge disputes solicitors help you?
Our landlord and tenant disputes lawyers provide pragmatic and strategic advice to prevent service charge problems escalating into significant disputes. If you don’t want to go to court or your lease has an alternative dispute resolution clause in it, we can usually get you a fast and cost-effective result without the need to issue formal proceedings. Where court proceedings are necessary, we’ll use our extensive litigation skills to fight your case.
Besides providing litigation support, we also have a large transactional real estate team who can review and improve your lease documentation going forward. For national tenants and landlords with large portfolios, getting the service charge clauses right from the outset can minimise service charge arrears, assist cash flow, improve building management and protect the value of your property holdings.
Make an enquiry Breach of Property Contract
Whether due to planning issues, vacant possession issues, or lack of funding or resources, there are a number of situations when one party to a real estate transaction cannot do what they said they would do. If you have suffered as a result of a breach of contract in property, from a buyer, seller, developer, contractor or otherwise, then Collyer Bristow can pursue a claim on your behalf.
Do I have a case for breach of property contract?
Breach of contract in property occurs when a party fails to fulfil their obligations under that contract. Sometimes this is obvious, such as when a seller refuses to transfer title to the buyer under a sale contract. Other times it is not so obvious. For example, the parties may disagree about whether certain pre-conditions have been fulfilled or whether repair work has been done on time or to the right standard.
There may be a lot of moving parts involved in a breach of contract claim and it’s shockingly easy to mess up a good claim by not responding to it properly. The courts do not react well when someone takes advantage of the other side’s mistakes, for example. Seeking legal advice at the earliest opportunity gives you a better chance of building a clear-cut, indefensible case.
What are the remedies for breach of property contract?
The usual remedies for breach of contract are:
- Damages for failure to perform the contract
- In some cases, specific performance of the contract
- An injunction to prevent further breaches
- If it’s serious enough, the right to terminate the contract
Bear in mind that terms of the contract can limit or expand your right to recover damages or exclude some of the remedies which might otherwise be available. For example, a liquidated damages clause will pre-determine the amount of damages for certain events, and an arbitration clause will mandate the use of arbitration to resolve your breach of contract dispute instead of going through the courts.
Our specialist lawyers can clarify your legal position and help you build the best case.
How can Collyer Bristow help?
No one enters into a real estate contract expecting to be let down but, when it happens, we know exactly what to do. With our breadth of real estate expertise, we’re able to quickly understand your problem and to find solutions.
Our breach of contract property lawyers take a commercial approach to property disputes, which often means seeking to resolve your dispute through alternative dispute resolution – settlement, mediation or arbitration. This approach can be very helpful in helping you to maintain important relationships and keep your real estate project on track.
Make an enquiry Development Disputes
Development projects tend to be high value and are often fraught with risk. It is notoriously difficult to plan for unknown future events and cover all possible eventualities in the legal documentation. Some of the most common types of development disputes arise when the parties have a different interpretation of the contract terms.
Whether you are a property owner, developer, joint venture partner or neighbour affected by adjacent land development, we can help. Our specialist development disputes team has a reputation for resolving disputes swiftly, so you focus on completing the project without the distraction of litigation.
What are development disputes?
Development agreements come in all shapes and sizes, from a simple standalone contract for a small development to a complex forward funding arrangement where the buyer agrees to bankroll the development in instalments as the construction progresses. The package of legal documents required for larger development projects is extensive and will commonly include joint venture agreements, options to purchase, agreements for sale, agreements for lease, planning obligations and overage provisions, to name just a few.
Everything could go smoothly, or a dispute could arise over any one of these agreements.
At Collyer Bristow, we help clients with the full range of development disputes including:
- Misrepresentation when selling property interests
- Clearing a site of existing tenants and trespassers
- Rights to light and oversailing
- Contractual interpretation disputes
- Failed joint venture arrangements
- Good faith clauses in development agreements
- Overage/ clawback trigger events and valuations
- Construction claims
Why choose us as your development disputes solicitor?
You probably don’t want to be embroiled in lengthy and costly litigation as this will affect the profitability of the development project. That’s why we always consider if there is a more innovative and creative approach to solving the problem. Many disputes can be dealt with by negotiated settlement, early neutral evaluation or arbitration, rather than court proceedings being issued. It depends on the nature of the dispute and the relationship between the parties.
As a full-service law firm, we have experts from across our contentious and non-contentious real estate and construction departments. Our solicitors from every discipline work together to protect your position, both from a pre-emptive risk-management perspective and when it comes to resolving issues after they have arisen. We represent developers, landowners, investors, tenants and property purchasers – as well as anyone affected by development – with a service tailored specifically for the size and complexity of your case.
Make an enquiry Dilapidations Claims
Most commercial tenants are required to keep the property in good repair during the lease and to hand it back in good repair at the end of the lease term. There will also be covenants around decoration and stripping out any alterations the tenant has made during their occupation. When disputes arise, it’s usually because the parties cannot agree what needs repairing and reinstating, and who should carry the cost.
What is a dilapidations claim?
The term ‘dilapidations’ refers to items of disrepair that the tenant is responsible for under the lease. These can relate to beaches of repairing covenants, decorating covenants, yield up provisions and reinstatement of the tenant’s alterations. Disagreements may arise for a number of reasons, such as:
- What work needs doing
- Who is responsible for doing it
- The quality of work required
- What’s recoverable in terms of costs and fees
While the tenant will generally be required to keep the premises in repair during the currency of the lease, most dilapidations claims arise when the tenant is vacating the property after the lease has ended.
What remedies does a landlord have in a dilapidations claim?
Technically, a landlord may have the right to forfeit a commercial lease if the tenant breaches the repair and decoration clause. However, the rules around forfeiture are fraught with difficulty. Also, from a commercial perspective, it will not usually be in the landlord’s best interests to throw the tenant out while they’re able to pay rent.
A common provision in a business lease called a Jervis –v- Harris clause. This is a DIY clause for the landlord, allowing him to enter the property, carry out any repair works, and claim the cost from the tenant. This is the preferred remedy for repair breaches in most cases.
The situation is different at the end of the lease. For terminal dilapidations, the landlord is usually able to claim damages for breach of covenant. The amount will broadly represent the reasonable cost to the Landlord of doing the work, professional fees, and loss of rent while the work is being carried out.
What’s the process for making dilapidations claims?
There is a standard protocol for evaluating dilapidations at the end of a lease. Usually, the landlord’s surveyor will prepare a ‘schedule of dilapidations’ identifying the dilapidations claimed and how much the landlord thinks they will cost. The tenant would then instruct their own surveyor to prepare a response.
The tenant’s response may disagree on value, or whether an item on the landlord’s schedule is factually necessary or goes beyond what a tenant is contractually required to do. Most dilapidations claims start out high and are negotiated down to a lower level that is satisfactory to both parties.
Make an enquiry Property Insolvency
In recent times, a growing number of cash-strapped companies have been struggling to settle debts owed to their creditors. This has a number of ramifications, especially for landlords who wish to minimise the possible knock-on effect to their income.
As well as supporting landlords, our experts specialise in helping insolvency professionals, lenders and investors dispose of and restructure their property assets. This includes the surrender and disclaimer of leases, granting leases, and the sale of distressed companies that own land and buildings.
What happens when a commercial tenant becomes insolvent?
There are different types of insolvency, and your legal rights will vary depending on the situation the tenant is in. However, it’s important to act fast at the first sign of trouble. Once receivers are called in, you generally will need the court’s permission before taking any enforcement action such as rent recovery or forfeiture. If the tenant goes into liquidation, the lease may be disclaimed and you become another unsecured creditor at the back of the payment line.
Tenant insolvency and its effect on the landlord
Landlords generally have more options before a tenant is formally insolvent. The following strategies can help your tenant out of a tricky situation while preserving your own rental flow:
- Making a concession deal, such as a payment holiday or reducing the rent
- Drawing down the rent deposit
- Claiming against a guarantor
- Negotiating a lease surrender
What other types of insolvency can Collyer Bristow help with?
Working closely with our highly acclaimed insolvency team, our property disputes lawyers assist in matters where any party to a real estate transaction is facing an insolvency situation, including:
-
- Insolvent tenants
- Insolvent landlords
- Disclaimer of leases by insolvency practitioner
- Acquisitions from an insolvent seller
- Property sales by liquidators, administrators and trustees in bankruptcy
- Law of Property Act Receiverships
- Advising those affected by the insolvency of the other parties such as surveyors, contractors and managing agents
Whatever your situation, insolvency is a time-sensitive issue. We have a reputation for acting quickly and decisively to protect you from losses and ensure the best possible outcome for your business.
Make an enquiry Commercial Rent Arrears Recovery
Some of the options for collecting rent arrears have been suspended by the 2020 Coronavirus Act. Generally, Commercial Rent Arrears Recovery can still be used where 554 days’ rent is outstanding but there’s a moratorium on forfeiture proceedings until 25 March 2022. The rules may be changed at any time so please talk to us before starting any enforcement action.
From a landlord’s perspective, rent arrears can be crippling. There are a number of options available for recovering these sums. The most effective are:
- Commercial Rent Arrears Recovery (CRAR)
- Forfeiture
- Court action for arrears outstanding
Whether you are owed rent or are struggling to pay rent, we can help you resolve the situation quickly and efficiently.
What is Commercial Rent Arrears Recovery?
The Commercial Rent Arrears Recovery process, or ‘CRAR,’ allows a landlord – acting through an enforcement agent – to seize and sell the tenant’s possessions in order to satisfy any overdue rent. Landlords can exercise this option providing over 7 days of rent is owed. A formal 7-day notice must be served on the tenant first, with further notices as the CRAR process progresses.
For the most part, the mere threat of seizing the tenant’s possessions will often be enough to flush out a payment. However, there are risks in using CRAR. The landlord may be waiving their right to forfeit the lease if there are recovery attempts ongoing, and there is also the possibility that the tenant will put their high-value goods out of the bailiff’s reach. Thought should be given to these risks before any notices are served.
Can you forfeit the lease for rent arrears?
Most commercial leases contain a forfeiture clause. The language will generally allow the landlord to enter the property and change the locks if the tenant fails to pay the rent, terminating the lease.
Forfeiture is an effective option if you want to stop the debt from escalating, as it allows the landlord to re-let the property to a more creditworthy tenant. However, it does not solve the issue of the rent arrears and you’d have to go to court to recover the debt.
Forfeiture is a complex area of law. Landlords can accidentally lose the right to forfeit if they accept rent or chase down tenants for rental payments. It’s important to take specialist legal advice before going down this route.
Do I have to go to court to recover rent arrears?
A landlord always has the option of starting formal debt proceedings against the current tenant, the tenant’s guarantor and, depending on the circumstances, a former tenant or a former tenant’s guarantor for the rent arrears outstanding. Careful consideration must be given to the tenant’s financial situation here as you are unlikely to get any money back if the tenant has no money.
Another option, assuming the debt is at least £750, is to serve a statutory demand. This is an aggressive tactic that forms part of the insolvency regime and ultimately leads to the winding up of the tenant company if they don’t pay the arrears by the time limit.
How can Collyer Bristow help?
Collyer Bristow’s real estate disputes team offers commercial advice and solutions to fit your particular situation. We have an excellent track record of getting rent arrears settled promptly and efficiently, and a reputation for using creative solutions to help you recover actual money and not merely the ‘victory’ of a win in court. Talk to us about your needs today.
Make an enquiry Covenant Enforcement
A covenant is a legally binding promise to do something, or not do something. In real estate transactions, we tend to come across covenants in two scenarios:
- Lease covenants, which relate to the tenant’s use and occupation of the property. If these covenants are breached, the landlord may be able to take enforcement action.
- Covenants on land, which require or prevent certain activities from being carried out. Many of the covenant enforcement issues we encounter come from developers looking to remove or challenge significant restrictions on their rights.
Whether you are a landlord looking to enforce a tenant’s covenants, or a landowner or developer looking to enforce or renegotiate restrictive covenants, we can help. We work tenaciously towards achieving the best outcome for your business.
How do covenants affect property?
A lease or a property deed may contain both positive and restrictive covenants.
Positive covenants require some type of action to be taken, such as constructing a boundary fence or keeping the property in good repair.
Restrictive covenants prevent certain activities or uses. For example, by not allowing more than two buildings to be constructed on a plot of land, or not allowing a tenant to use the property for residential purposes. Restrictive covenants are very important as they can affect the value of land or its intended use.
When covenant enforcement issues arise, it is usually because:
- Either a landlord or tenant has failed to comply with its covenants in the lease
- A landowner wishes to enforce a restrictive covenant against their neighbour, who is carrying out prohibited or unsympathetic work
- A developer wants to challenge restrictions on their site and have them amended or removed
Collyer Bristow can advise you on the legal position and help to resolve disputes over the covenants affecting your property.
What is the process for enforcing lease covenants?
If a tenant has breached a lease covenant, the first step is to consider whether the breach can be rectified. Various remedies are available to help the landlord collect rent arrears, for example. There may also be DIY clauses in the lease which allow the landlord to enter the property, fix the beach, and claim the cost from the tenant.
If the breach is sufficiently serious, the landlord can seek to end the relationship by forfeiting the lease.
What is the process for enforcing land covenants?
For development sites, the good news is that a restrictive covenant does not mean your development plans are doomed. It is often possible to have the burden of a covenant removed if it is too ambiguous, has become obsolete, is prohibited by competition law, or where it impedes some reasonable use of the land. The process involves an application to a specialist court called the Lands Tribunal.
For landowners who wish to stop prohibited work, the usual remedy is an injunction. This would halt all development activity and work that is already completed would have to be demolished.
Fortunately, most cases can be settled without going to court. A more practical way is to negotiate a release from the landowner who has the benefit of the restrictive covenant – often in return for compensation. The agreement must then be embodied in a properly drafted deed that will permanently amend the property’s title.
How can Collyer Bristow help?
Covenant enforcement is a technical area of law. It will require legal advice from a specialist landlord and tenant or development disputes solicitor. At Collyer Bristow, we use our decades of experience to help landlords, tenants, developers and landowners mitigate the impact of covenant beaches, without adding significant costs or delays. Talk to us about your needs.
Make an enquiry Forfeiture of Lease
A covenant is a legally binding promise to do something, or not do something. In real estate transactions, we tend to come across covenants in two scenarios:
- Lease covenants, which relate to the tenant’s use and occupation of the property. If these covenants are breached, the landlord may be able to take enforcement action.
- Covenants on land, which require or prevent certain activities from being carried out. Many of the covenant enforcement issues we encounter come from developers looking to remove or challenge significant restrictions on their rights.
Whether you are a landlord looking to enforce a tenant’s covenants, or a landowner or developer looking to enforce or renegotiate restrictive covenants, we can help. We work tenaciously towards achieving the best outcome for your business.
How do covenants affect property?
A lease or a property deed may contain both positive and restrictive covenants.
Positive covenants require some type of action to be taken, such as constructing a boundary fence or keeping the property in good repair.
Restrictive covenants prevent certain activities or uses. For example, by not allowing more than two buildings to be constructed on a plot of land, or not allowing a tenant to use the property for residential purposes. Restrictive covenants are very important as they can affect the value of land or its intended use.
When covenant enforcement issues arise, it is usually because:
- Either a landlord or tenant has failed to comply with its covenants in the lease
- A landowner wishes to enforce a restrictive covenant against their neighbour, who is carrying out prohibited or unsympathetic work
- A developer wants to challenge restrictions on their site and have them amended or removed
Collyer Bristow can advise you on the legal position and help to resolve disputes over the covenants affecting your property.
The Coronavirus Act 2020 has placed a moratorium on a landlord’s right to proceed with forfeiture during the pandemic. This is an evolving situation so please contact us for the latest information.
Landlords have the right to effectively repossess commercial premises by forfeiting the lease of a tenant who doesn’t behave or who cannot pay rent. You can forfeit a lease in two ways: by peaceable re-entry, or by issuing proceedings in court. Although the act of forfeiture does not remedy the tenant’s breach or produce any money, it will prevent the breach from reoccurring and rid the landlord of a ‘problem’ tenant.
When can a landlord forfeit a commercial lease?
Landlords can forfeit a business lease whenever the tenant is in breach of covenant. The most common breach is failing to pay rent. This is one of the easier beaches to deal with as landlords usually have the option of forfeiting by peaceable re-entry. This is the act of physically re-entering the premises and changing the locks, effectively terminating the lease.
The advantage of peaceable re-entry is that it pushes the ball back into the tenant’s court. If the tenant disagrees with the forfeiture, they have to go to court to seek relief. In most cases, a court will only grant relief if the tenant applies promptly and discharges the arrears in full, plus interest and costs.
What is the court process for forfeiture of lease?
For all breaches other than non-payment of rent, the landlord must serve a notice under s146 of the Law of Property Act 1925 before forfeiting the lease. This gives the tenant a reasonable time to remedy the breach and pay compensation. The landlord can then either peaceably re-enter the property or issue court proceedings if the tenant does not comply.
How can Collyer Bristow help?
Even if you’re sure that a right to forfeit has arisen, it’s best to proceed with caution and take legal advice as soon as a breach occurs. It’s easy for landlords to accidentally lose the right to forfeit by, for example, chasing the tenant for payment. A tenant can claim relief against forfeiture, essentially reinstating the lease, and also make a claim against you for wrongful forfeiture if you try to re-enter when a right to forfeit has been waived.
At Collyer bristow, we advise landlords and tenants on all aspects of the forfeiture process, including:
- Determining whether the right to forfeit has arisen
- Arranging for agents to peaceably re-enter the property
- Preparing and serving section 146 notices
- Issuing court proceedings
- Arranging for possession orders to be enforced
- Seeking relief from forfeiture for tenants
If there has been a breach or possible breach of a lease covenant, please contact us urgently. We’ll talk you through the options and make sure your position is protected, with practical, cost-effective solutions tailored to your needs.
Make an enquiry Business Lease Renewals
The Landlord and Tenant Act 1954 gives most commercial tenants the right to stay in the premises after the lease comes to an end and to apply for a new lease. Whether you are looking to renew a lease, oppose a lease renewal, or need help in agreeing on the new lease terms, we can help you take the course of action that’s best for your business.
What are business lease renewals?
Most commercial tenants will have the automatic right to renew their lease when their current lease comes to an end. There are limited exceptions for very short leases and where the parties have specifically opted out of the legislation.
Generally, the 1954 Act says that if a tenant wants to stay in the property, a landlord must give them a new lease. There are only a few grounds for refusing, such as where the tenant has repeatedly failed to pay rent or if the landlord wishes to redevelop the property.
What’s the business lease renewal procedure?
Either the landlord or tenant can kick off the lease renewal procedure. It consists of a series of notices, counter-notices and a court application, with hard-and-fast deadlines for each step. If you miss a deadline, the right to renew the lease (or oppose a renewal) may be lost.
If the renewal is uncontested, the landlord and tenant can press ahead with negotiating a new lease with open market rent. This is a good opportunity to set new goals and establish more favourable lease terms – whether that’s streamlining service charge provisions for a landlord or building in a break clause for a tenant. The outcome will depend on the goals and bargaining power of the parties. Instructing a skilful real estate lawyer can help you get the results you need.
If you cannot agree the new terms, then you can ask a judge to decide them for you. However, a court is likely to order lease terms that preserve the status quo, and you’ll need a very strong argument to prove that changes should be made.
Why choose Collyer Bristow for your business lease renewal?
Acting for both landlords and tenants, we can help:
- Check the expiry dates for your leases
- Review whether rights apply under the 1954 Act
- Consider your renewal strategy at least 12 months before the expiry date
- Guide you through the renewal process within the relevant time windows
- Contest a lease renewal on statutory grounds
- Gather clear and complete expert evidence to support the market rent
- Negotiate a favourable renewal lease
Owing to constant fluctuations in the market, business lease renewals are often tactical. You can often make significant gains by getting the timing right. We recommend that you get in touch 12-18 months before the lease ends so we can advise you on the best course of action.
Make an enquiry Party Wall Disputes
Collyer Bristow’s specialist party wall solicitors can advise developers and property owners on their rights and obligations under the Party Wall Act – and we can support you all the way through to court action if the work results in a dispute.
Make an enquiry Possession of Land Claims
Collyer Bristow’s adverse possession lawyers have years of experience assisting clients with possession of land claims. We can help you:
- Make an adverse possession claim
- Defend an adverse possession claim
- Evict squatters and travellers
- Legally end leases, tenancies and other rights of occupation
- Establish legal ownership where there is no clear record
Make an enquiry Professional Negligence
Professional Negligence in Construction & Real Estate
When you place your confidence in a real estate professional, you rely on them to do a good, honest job to the best of their professional ability. If that doesn’t happen and you suffer loss as a result, you may be able to recover compensation. Collyer Bristow is an expert in claims against property professionals. We lean on decades of experience to give you the best chance of making a successful claim.
How do I know if my professional adviser was negligent?
Real estate transactions involve experts from a wide range of disciplines, including surveyors, valuers, property agents, solicitors, architects and engineers. All of these people should work to a good professional standard, meaning they should not be causing you harm through their incompetence or carelessness.
To make a claim in professional negligence, you need to show that:
- The professional owed you a duty of care
- The professional breached their duty of care by virtue of their conduct
- You suffered loss as a result of this breach
- The loss was a reasonably foreseeable consequence of careless behaviour.
What standard of work is expected of property professionals?
In general terms, a professional will have breached their duty of care if their conduct fell short of the standards expected of a reasonably competent member of their profession. Each discipline will have its own regulatory bodies and codes of conduct, such as the standards laid down by The Royal Institute of Chartered Surveyors or the Royal Institute of British Architects. Assessing the professional’s actions against these standards is the first step in any claim.
However, demonstrating professional negligence can be challenging. Property specialists are often hired because they are able to think creatively and come up with solutions that their peers may not have thought of. Building a case requires a large amount of evidence and an objective assessment of the facts.
The burden of proof will be on you, the person making the claim, to demonstrate that the professional’s work was not merely poor, but fell short of professional standards.
Why choose Collyer Bristow for your professional negligence claim?
Collyer Bristow knows property inside out. We can assist with all types of professional negligence claims, including helping property professionals defend their position when an allegation of negligence is made.
Our team is renowned for handling complex and high-value claims. Negligence by real estate professionals can be particularly damaging since their mistakes can cost the client hundreds of thousands of pounds. We are known to doggedly fight your corner, all the way to trial if necessary, to obtain the best possible outcome for your business.
Make an enquiry Right to Light Claims
Rights of light disputes can be a major headache for development projects in the conception stages – and cause even more problems for those that have already begun. Our rights of light solicitors can help you identify and manage any issues that could disrupt your project. We also help property owners protect their rights to light from the shadow of surrounding development.
What are rights of light and who has them?
A right to light is an easement. It gives property owners the right to receive light through defined windows, skylights and glass roofs in their building. Rights to light protect the value and amenity of your property and adjoining owners cannot compromise them without your consent. For example, a developer could not construct a skyscraper next to your building, or even instal a fire escape, if that would materially restrict the passage of light to your property.
Generally, any building that has received natural daylight for more than 20 years will have a right to light. The owner is entitled to receive compensation for their buildings’ loss of light if anyone interferes with it.
What do rights of light mean for developers?
Developers must consider rights to light at a project’s infancy. Infringing on your neighbours’ rights to light could result in costly conflicts, including:
- Large compensation claims
- Injunctions, bringing the construction to a halt
- A court order preventing the development altogether
- Expensive costs and legal fees
- In the worst case, project demolition
At Collyer Bristow, we specialise in helping developers put together a clear strategy for managing rights of light at the outset of a scheme. There are various options, ranging from direct negotiation with affected parties to putting insurance in place to cover potential claims. We can also serve light obstruction notices in an attempt to ‘interrupt’ a neighbour’s 20 years’ use and nip a rights of light claim in the bud.
Our aim is to give you certainty, balancing the risks and costs of action against the overall value of the development project.
What if I am concerned about a new development?
If you are concerned about a new development, then you should speak to a solicitor about your rights and options. We frequently negotiate favourable compensation payments from developers who would rather settle your rights of light claim amicably than risk the delays and costs of court proceedings.
The amount of financial compensation due to any property owner depends on the facts of each case. Damages can range from a few hundred pounds to tens of thousands of pounds depending on how much light has been lost. There’s also the possibility of an injunction if the development would result in severe loss of light.
Make an enquiry Nuisance and Annoyance Claims
It is usual for business tenants and landowners to be bound by restrictive covenants preventing them from using their property in a certain way. One such covenant is an obligation not to cause a ‘nuisance’ or ‘annoyance’ to the person with the benefit of the covenant. This person may be the landlord or an adjoining landowner, or it could include the owners or occupiers of an entire development or neighbourhood.
Whether someone is accusing you of causing a nuisance, or you just want a peaceful life, we can help. At Collyer Bristow, we aim to resolve nuisance claims swiftly diffuse the situation if you can, avoiding a pattern of escalating tit-for-tat
What is a ‘nuisance’ and ‘annoyance’?
This is a difficult question to answer as there is no absolute standard. Generally, a nuisance is something that causes unreasonable and substantial interference with the use and enjoyment of a person’s property. A one-time event is unlikely to cause a nuisance. But if a neighbour is burning rubbish all day and night in a residential area, or a tenant is continually blocking a shared parking area, then you may well have a nuisance claim.
Annoyance tends to have a wider interpretation. If a normal, sensible person would be annoyed or aggrieved by the activity, then an annoyance has probably taken place. It’s a common-sense test – but it has enormous ramifications. For example, the obstruction of a view could fall within the remit of annoyance, as could erecting scaffolding over another tenant’s signage.
How do you resolve nuisance claims?
Because there is no single definition for nuisance and annoyance, these claims can be very tricky to manage. If a dispute makes it to court, then it’s likely to require expert evidence. The court will also look at the character of the area to figure out if the activity is a breach of the nuisance and annoyance covenant.
Ideally, the parties should attempt to negotiate themselves out of the dispute. Like it or not, you are neighbours and maybe so for a long time. If an amicable settlement is not possible, an aggrieved party can apply for an injunction to stop the problem activity.
Where a tenant is in breach of a nuisance clause, the simplest option may be to remove them from the premises by forfeiting the lease.
How can Collyer Bristow help?
Before developing a site, it’s worth checking to see whether ‘nuisance and annoyance’ covenants could throw a spanner in the works. Where such covenants exist, we can help assess the situation and decide the most suitable course of action. This might include re-negotiating the covenant with the benefitting party or applying to have it varied or discharged.
If you need to get rid of a nuisance tenant, we can help with that, too. The process is different depending on whether the property is residential or commercial. Our expert property litigation solicitors deal with all types of leases and can find the best solution for your needs.
Make an enquiry Breach of User Clause
All business leases have a use clause specifying how the property is to be used. Typically, the clause will have additional components specifying ways in which the property may not be used, for example, for illegal purposes or in ways that cause a nuisance to neighbours.
For landlords, discovering that a tenant is using the property for an unauthorised purpose is your cue to seek legal advice, fast. Ignoring the breach can land you in legal hot water and put your rental revenues in jeopardy.
What are the consequences of a breach of user clause?
Landlords should keep a close eye on their tenants to ensure that property is being used in accordance with the lease. Unauthorised use of premises can have a number of consequences, including:
- Breach of planning laws
- Breach of a covenant affecting the landlord’s title
- Breach of a superior lease or mortgage conditions
- Breach of a covenant given to another tenant in the development, for example, an agreement to prevent a similar business from trading nearby
Each of these situations could become very costly for the landlord who may find himself embroiled in legal action through no fault of his own.
How should a landlord respond to a beach of user clause?
The remedies available to the landlord depend on whether the breach can be rectified or whether it’s a ‘once-and-for-all’ breach. A number of responses are available, including:
- Giving retrospective consent to formalise the change of use
- Obtaining an injunction to stop the unauthorised use
- Seeking damages from the tenant for breach of covenant
- Forfeiting the lease
This is one area where a landlord needs to tread very carefully. If you do anything to approve the unauthorised user, you may be waiving your right to bring action for the breach. A waiver can be implied from your words and actions – this is not the type of breach where you can turn a blind eye.
How can Collyer Bristow help?
Breach of use clause cases are rarely a standalone problem. More usually, they are tied in with assignment and subletting, and they involve the breach of other clauses such as the alterations clause or the duty to comply with planning legislation. This means that disputes can get very complicated.
Collyer Bristow specialises in complex landlord and tenant matters. We can help you choose the most appropriate remedy for your situation, acting quickly and decisively to protect yourself from the consequences of breach of use clause claims.
Make an enquiry Statutory Obligations
Landlords of all types of property – but especially residential property – have various statutory obligations towards their tenants. These are duties that are set out in legislation, as opposed to contractual duties that are set out in the lease. Statutorily implied obligations will apply in all cases, but the lease may impose a greater liability on the landlord.
What are a landlord’s statutory obligations?
The list of landlords’ statutory obligations depends on the type of property. However, they generally cover issues of health, safety and fair accounting, such as:
- Keeping the structure and exterior of a residential building in repair
- Complying with fire safety regulations
- Make sure that the landlord’s fixtures are safely installed and maintained
- Keeping gas and electrical systems safe
- Managing asbestos
- Providing an Energy Performance Certificate with a minimum energy performance rating
- Holding rent deposits properly
- Observing statutory controls on service charges
What are the tenant’s remedies if the landlord is in breach?
Again, this depends on the type of property and what the landlord has done wrong. For example, a residential tenant can apply to the First-tier Tribunal (Property Tribunal) for a ruling as to how much service charge is payable and whether the landlord’s costs are reasonable. Failing to comply with asbestos regulations is a serious criminal offence and can result in a fine or even imprisonment, as well as a damages claim from affected tenants.
If you are a landlord or tenant of commercial or residential property, talk to Collyer Bristow. Our real estate disputes team can give you advice on the landlord’s responsibilities and ensure your property is ‘fit for lease.’ If there’s a dispute over something the landlord has or has not done, we can help you take the right action at the right time, including fighting your case in court if necessary.
To find out more about how we could help you, contact one of our solicitors today.
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Real estate disputes key contacts
- Michael
GracePartner - Head of Real Estate
Talk to Michael about Commercial real estate and Real estate disputes
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Recent experience
We successfully acted for the lessees in a prime residential building in London, against the landlord's failure to comply with statutory obligations regarding service charges and maintenance of service charge records. This has resulted in a number of complex and inter-related claims relating to service charge arrears, reasonableness of service charges and non-compliance with statutory procedures with regard to major expenditure.
Dispute with residential landlord
Michael GracePartner - Head of Real Estate
Case study
We successfully acted for the lessees in a prime residential building in London, against the landlord's failure to comply with statutory obligations regarding service charges and maintenance of service charge records. This has resulted in a number of complex and inter-related claims relating to service charge arrears, reasonableness of service charges and non-compliance with statutory procedures with regard to major expenditure.
We successfully acted for a commercial landlord whose tenant was in breach of its lease on numerous counts, including using the property in breach of the user clause and causing a nuisance and annoyance.
Dispute with commercial tenant
Michael GracePartner - Head of Real Estate
Case study
We successfully acted for a commercial landlord whose tenant was in breach of its lease on numerous counts, including using the property in breach of the user clause and causing a nuisance and annoyance.
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