Economic Climate ‘Pushing More Landlords And Tenants To Litigation’

Expert Describes Reports Of Increase In Real Estate Litigation As Unsurprising

16.08.2012

Reports of a sharp upturn in the volume of property litigation cases and the number of high profile property litigation cases going through the courts have come as no surprise, according to real estate litigation specialists.

With little improvement emerging in the property sector over recent months, commentary in national and legal press has highlighted the increased volumes of certain types of property disputes.

Danny Revitt, a Partner and expert in the area at Irwin Mitchell, said such findings have not come out of the blue, with both landlords and tenants keen to push their own very different agendas as the property market continues to struggle.

He explained: “With so many businesses feeling the strain at present, it is barely a surprise to see that this has led both owners and occupiers of real estate to carefully consider their options when it comes to protecting their financial position. However, this is of course often much easier said than done.

“We’ve seen more activity in certain areas, particularly where tenants try to exercise break clauses in leases in order to perhaps move to cheaper premises or negotiate an agreement with better terms and landlords challenge the validity of the break notice.

“Another common issue is dilapidation disputes, with landlords anxious to recover money from vacating tenants to pay for repairs that they should have carried out when in occupation and the departing tenants arguing that any damage to the premises has not affected the value.”

Danny added: “Another sign of difficult economic times – tenants going into administration – can of course also lead to further issues, as the administrators try to sell the business quickly and allow the new owners into occupation of the premises without the landlord’s consent. This can leave the landlord with both rent arrears and the dilemma of what to do with a new occupier who they haven’t vetted.

”Finally, in addition to disputes over rent arrears, rent reviews can be a significant battleground between landlords and tenants.

“It will be interesting to see how the tactics employed by landlords and tenants in such matters change, and possibly reverse, when the property market eventually starts to improve.”