Property Disputes (including Private and Commercial Tenancy Disputes)

Property disputes can be both timely and costly. It is therefore important that you obtain the correct advice in respect of your rights and legal options. It is in both parties’ interests for the dispute to be resolved as soon as possible, not only to avoid substantial legal costs but to mitigate any losses that either party is looking to recover. A quick resolution allows the parties to move on from what can be a costly and difficult situation. Regardless of your situation, our team is available to provide advice to ensure your objectives are met in a cost-efficient way.

Our dispute resolution team have acted in a wide range of property-related disputes both for and against property owners, occupiers, local authorities and developers. We set out below several examples of the types of disputes that can arise.

Lease disputes

The underlying cause of a lease dispute is usually in relation to the correct interpretation of a specific clause or an allegation that a provision has been breached e.g. by non-performance or by carrying out a forbidden act. Lease disputes can often be very technical and the risks in not acting quickly or correctly can be substantial and lead to financial loss.

Boundary Disputes

A boundary is often an invisible line separating one property from another. Landowners need to know the boundaries of their properties as it inevitably determines to what extent they can exercise their rights over it.

Given the value of land, it is common for disputes to arise between neighbouring parties over this imaginary line. Whilst a boundary can at times be presumed, due to the existence of a physical structure such as a wall or fence, parties can still disagree over the correct positioning of the said structure.

A failure to protect your land from trespassers or even your neighbour can lead to claims for adverse possession (see below).

Disputes regarding ownership of land

Whilst a person’s ownership of land/property is usually evidenced by the title there may be others who also have an interest in the land/property despite not being expressly named on the title. Individuals with a vested interest are known as Beneficial Owners. The property may be held in trust for another person as they paid for it, but it has been purchased in another’s name. They may be claiming a share or enhanced share of it as they have contributed to its price or improvements or have paid the mortgage.

Even where the parties acknowledge each other’s interest disputes can still arise as in relation to its sale, management, any income that is derived from it, occupation etc.

Where there is a dispute between if negotiation fails it will generally be resolved by way of a claim under TOLATA which is the abbreviation for The Trusts of Land and Appointment of Trustees Act 1996.

Adverse Possession

Adverse possession is a legal principle which allows a person (and any predecessor in title) to obtain ownership rights over land they do not own. This often arises where an adjoining owner has used a piece of your land for a defined unbroken period, with your knowledge (or where you should have had knowledge of the same) but you have failed to object to the same. The quality of the legal advice you obtain can be the difference between you gaining or losing that piece of land.

Misrepresentation

In a highly competitive market, sellers/landlords often look to get the best price possible when selling a property or granting a lease. Sometimes they will misdescribe the property or fail to mention that the owner has been in dispute with an adjoining owner over an important matter or that the property has suffered from an event such as flooding. Misrepresenting a property whether positively or by omission may lead to problems and loss and can be actioned

To pursue a claim in this respect, a claimant will have to establish that the information provided at the time of entering into the agreement was (a) false or that relevant information was omitted; (b) that the misinformation or omission was relied on when proceeding; and (c) that the false information/omission has resulted in a loss.

Lease renewals/disputes under the Landlord and Tenant Act 1954

Under the Landlord and Tenant Act 1954 (‘the Act’), when a commercial tenancy has come to an end, the Tenant will have a Statutory Right to renew the lease, unless this right was excluded when the Lease was entered into

A Tenant is entitled to request a new tenancy by serving a request on the Landlord under S26 of the Act.

A Landlord may serve a notice upon the Tenant under S25 of the Act, indicating that he is prepared to renew the Lease and setting out the proposed terms for renewal. Conversely, the Landlord may serve a notice under S25 indicating that he is not prepared to renew the lease and will oppose any application for renewal the Tenant makes. This can only be done on limited grounds which are set out in Section 30 of the Act.

A failure to adhere to the prescribed forms and deadlines when dealing with lease renewals will have serious consequences.

Repossession of property, including evicting squatters

Possession proceedings involve a tenant or mortgagor/borrower being ordered to give up possession of their property to a landlord or lender. The procedure for possession claims is set out in Part 55 of the Civil Procedure Rules and Practice Direction 55A.

In response to the outbreak of COVID-19, the Government sought to relieve pressure on residential property tenants whose income had been impacted by the lockdown. Measures including extending the statutory notice period for landlords were incorporated in the Coronavirus Act 2020.

Whilst the measures were put in place to protect tenants during the pandemic, this has frustrated landlords who have been left out of pocket and unable to regain possession from tenants who have not paid their rent. There are however still active steps landlords can take to regain possession. Similarly, tenants should obtain legal advice if a landlord is seeking to take rogue steps to obtain possession.

With regard to squatters, it is a criminal offence to trespass in residential property. This means that police assistance can be sought to remove squatters, without having to make an application to the Court. Unfortunately, the same does not apply to commercial property where a Court Order is required. In some situations, obtaining possession can be expedited by way of a separate application requesting an urgent hearing (where the final order is enforced by bailiffs), or an application for an interim possession order (where the order is enforced by the police). The appropriate route will depend on the circumstances. Advice should be obtained at an early stage to determine the quickest and most cost-effective route of regaining possession.

Disputes over rent, service charge and insurance premiums

Inability to pay rent – If a Tenant has not paid its rent due to an inability to do so rather than unwillingness, it is imperative that action is taken quickly to avoid a situation where the arrears accumulate substantially.

Service Charge Disputes – Under the terms of a lease, landlords can recover their costs of providing services in respect of a building. This is what is known as Service Charge. Service Charge issues are one of the main areas of dispute between landlords and leaseholders. The lease should set out what services are to be provided by the landlord and which ones the landlord can charge for.

A poorly drafted Lease can lead to a dispute over its interpretation. Disputes can also arise in the simplest of scenarios such as a leaseholder’s outright refusal to pay rent or service charge, or a contribution to the building insurance premium.

Where there is a dispute over rent, service charge or insurance contributions, if it is not resolved by negotiation, it will be referred to the Land Tribunal for determination. The Tribunal is required to consider what is ‘reasonable’. There is no definition as to what is reasonable, and the matter is determined through a review of the documentation available and following careful consideration of the facts and evidence.

Enforcement of covenants in leases

The terms of a lease set out each parties’ rights and obligations. It is therefore important that they are adhered too. A failure to do so can lead to either party taking legal action to enforce their rights, and in more extreme circumstances determine the lease.

If you believe there has been a breach of the lease terms you will need to act quickly. The failure by a Landlord to act in a timely manner in respect of certain breaches can amount to a ‘waiver’ of the breach. This may bar the Landlord from enforcing the clause concerned and acting on the breach.

Forfeiture and relief from forfeiture

Where a dispute has arisen between the landlord and tenant over unpaid rent or a substantial breach of the lease, the landlord may consider exercising a forfeiture clause. A forfeiture clause is a clause that allows the landlord to terminate the lease and regain possession of a property.

Forfeiture is a draconian step and it should not be used arbitrarily. Accordingly, the law provides tenants with the right to apply to the court for relief from forfeiture. Such an application must be made within 6 months of the date of forfeiture, after which the right to apply is lost. In order to succeed in an application for relief a tenant must have remedied all breaches of covenant (including paying any rent arrears) by the date of the hearing. If any of the breaches are not capable of remedy e.g. using the property for illegal or immoral purposes, the court will not grant relief.

A Landlord should during the 6 months following forfeiture consider not to granting a new Lease of the property, but instead granting a Licence to Occupy pending the expiry of the 6-month period. Alternatively, any lease granted should provide that if the previous tenant is successful in its application for relief from forfeiture, the new lease will automatically come to an end.

Dilapidations claims during or at the end of your tenancy

A well-drafted lease will usually contain provisions requiring the tenant to rectify any disrepair, damage or other defects at the end of the lease and to repair and re-decorate during the term of the lease. Failure to do so can lead to the service of an Interim Schedule of Dilapidations or Terminal Schedule of Dilapidations either requiring the tenant to carry out the repairs, or to reimburse the landlord for the cost of doing so or in respect of the value of the Landlord’s freehold interest being diminished by the lack of repair. This makes dilapidations a very common area of dispute between landlords and commercial tenants.

Rent reviews

A lease will often provide dates for the rent to increase by reference to a fixed formula rather than a fixed certain amount. The Landlord will serve notice of a rent review and the tenant may try to negotiate a lower increase. If the parties cannot reach agreement the matter may have to be determined by the court or alternatively by an Arbitrator under the PACT scheme.

Insolvency

The current pandemic has had a significant impact on both landlords and tenants. If you are experiencing issues with the ability to pay rent or that you are not receiving it, please look at our insolvency page for more information.

Please note that we do not provide advice in relation to social housing/council tenancies.

Latest Insights

Fletcher Day's excellent practice provides good quality, realistic and sensible advice, with particular expertise in the casual dining and retail sectors. - The Legal 500, 2019