Real Estate Dispute Resolution

Do we need a solicitor to exercise the break clause in our lease?

You can serve a break notice yourself, but we would strongly recommend that you instruct a solicitor to do it for you. That’s because there are strict legal formalities to be observed throughout the process. If the notice is not prepared or served correctly, the lease will continue, and this could have a significant financial impact on the business.  It’s imperative for example that you:

• Comply with the terms of the lease as to how the notice is served
• Observe all relevant timings regarding the notice
• Ensure you serve the correct landlord, bearing in mind that they may not be the party who originally granted the lease to you.

We are a commercial landlord. Our tenant is insolvent. Can we use the rent deposit for arrears and take back the property?

Different rules will apply to your tenants depending on whether they are a company, an individual or a foreign entity.  Also relevant is the type of insolvency and how the rent deposit is held- both will dictate whether you are able to make a withdrawal from the deposit to settle rent arrears.

Most modern leases allow the landlord to forfeit the lease and repossess the property when a tenant is insolvent or fails to pay the rent, provided this right has not been waived. Waiver is a complex legal concept on which we would advise you get legal advice. Also again the type of insolvency will be relevant and may require you to first obtain the court’s permission to take the property back.

We have received a notice from a telecoms operator that they want to inspect the roof of our building to see if it’s suitable for a telecoms mast. Can we stop them?

Telecoms operators have strong rights under the Electronic Communications Code, and these were strengthened in 2017.  These include the right to undertake a site survey (known as a multi skilled visit) to check if the building is suitable for telecoms equipment. This is the start of a process which could result in a mandatory telecoms agreement being imposed on you to install the telecoms equipment on your land for a period of time.  You can refuse access but in practical terms the operator can apply to the Upper Tribunal for an order requiring you to give access. The Tribunal will usually grant that order unless:

• You can show why any prejudice to you outweighs the public benefit in terms of the installation of the mast or other equipment
• You are planning to redevelop the land

Both conditions are difficult to prove. In our experience it’s sometimes the case that by pushing back against the operator’s request for access from the outset the operator may look for an alternative site. We’d advise you however to review your approach if the operator does threaten Tribunal proceedings.

We have a fully let commercial building which we are intending to redevelop. What are our options for getting vacant possession?

Your options will depend on a number of factors, including:

• The nature of the proposed redevelopment
• Whether there are any break clauses in the lease which you can exercise
• When the lease expires
• Whether the lease benefits from the Landlord and Tenant Act 1954 (“the Act”)
• Any rights you may have to enter into the property and carry out any works and whether you need possession to do that.

The Act itself restricts the basis upon which a lease can be terminated and although redevelopment is one ground for termination the landlord also needs to comply with the additional conditions associated with the redevelopment ground for termination. In addition, if successful in terminating the lease, the landlord will usually need to pay the tenant compensation.

Depending on your commercial priorities and on the terms of the lease, it could be that you simply need to wait until the lease expires and then undertake the works. Other approaches might be to exercise an early break clause, agree an early surrender with the tenant or agree to pay them a sum of money if they forego their rights under the Act (in return for a lease which does not benefit from the protection of the Act).

We have owned a warehouse for many years and have not received any business rates demands until recently. Do we have to pay the demands that relate to many years ago?

Potentially yes as there is no strict time limit for the demand of rates. But there may be some useful arguments you can use to reduce your liability. For example, could the local authority have issued the demands earlier? Are you able to show that you have suffered as a result of the lateness of the demands? If the demands relate to historic years and could have been issued in a more timely fashion, you may have a good opportunity to challenge these business rates demands, particularly if you would have planned your finances differently had then been served in a more timely fashion.

We own a commercial building which is fully let to a single tenant. Who is liable for the business rates? 

Business rates are normally payable by the person or company entitled to possession of the property, i.e the tenant under a lease. However, it is possible for a landlord and tenant to agree otherwise in the lease. There may also be other reasons why the landlord rather than the tenant might be liable, such as where there is only a single entry with the billing authority for the wider estate, or the landlord has effectively taken back control of the relevant building.

As a charity, we have applied for business rates relief in relation to our office premises. It’s been refused. What can we do? 

If you are a charity and are using a property mainly for charitable purposes, you may well be entitled to charitable rate relief. However, there are a number of eligibility criteria which you have to meet, and the local authority may not be satisfied that you have proved the necessary or sufficient information to show these in your application. You should ask them to clearly set out the criteria and carefully review your application and the local authority’s response to assess the information you have provided  against the their requirements. If you believe the local authority has made the wrong decision you can challenge their refusal to grant charitable rate relief.

Our business rates surveyor has challenged the amount of business rates levied on our shop premises, but the claim has been rejected. Can we appeal? 

If your business rates surveyor has gone through the “check challenge and appeal” procedure in relation to the amount of rates payable for your property, and the local authority have rejected that challenge, it is possible to appeal that decision to the Valuation Tribunal. There are strict time limits in which to do so, so you must act quickly, and you must comply with the rules concerning the nature and content of such an appeal. You will be required to support any challenge with evidence on which your surveyor can assist, and you may have to attend a hearing (remote or in person) for the appeal to be determined. If you are unsuccessful at the Valuation Tribunal you may be able to appeal again to the Upper Tribunal and the Courts

Our tenants are refusing to pay service charges for necessary but expensive emergency roof works we have carried out. What can we do? 

You cannot recover more than £250 per tenant for these works unless you have followed the major works consultation process under s20 of the Landlord and Tenant Act 1985.  If the works were so urgent that you were not able to consult you can make an application to the First Tier Tribunal for dispensation. You will need to pay your own costs of that application and will usually be ordered to pay the leaseholders costs too. Other conditions could also be attached to any Order from the Tribunal granting dispensation.

If you did undertake the s20 consultation process or you have successfully applied to the Tribunal for dispensation as described above, and any demands served on your tenants were validly served, then we would usually advise issuing the tenant with a formal Letter Before Action in respect of the unpaid sums. In many cases the tenant will at that point pay the amount due.

If payment isn’t made by the tenant we usually recommend issuing County Court debt proceedings, with a view to seeking judgment for the arrears, legal costs and interest. If the tenants then fail to satisfy any Judgment obtained against them, we could advise you on your enforcement options, which may include forfeiture of the lease.

We own the freehold of a block of flats and want to sell our interest. Do we have to offer it to the flat owners first? 

The Landlord and Tenant Act 1987 (“the Act”) requires certain freeholders of flats to offer their interest to the flat owners before they sell it.  Depending upon the existing position such as the number of tenants and the type of disposal the sale could be exempt but there are limited circumstances in which that is the case.  It is imperative that if the Act applies landlords comply with its procedures because criminal and other sanctions apply if you fail to do so.

One of our assured shorthold tenants is causing a nuisance to our other tenants. Can we get them to leave?

In these circumstances you can usually serve a notice pursuant to Section 8 of the Housing Act 1988 (“the Act”), informing the nuisance tenant of your intention to begin possession proceedings under Ground 14 of Schedule 2 of the Act.  Depending on the terms of the tenancy, you may also be able to rely on Ground 12. If they failed to vacate upon the date stated in the Notice (typically 2 weeks from service but it could be upon service of the Notice), then you would be entitled to issue possession proceedings at Court to seek a possession order. A Judge would have complete discretion, however, as to whether to grant a possession order in these circumstances. It is therefore likely that much would depend on the severity of the nuisance, the impact it has been having on other tenants, and the extent to which you can persuasively evidence the situation.

An alternative would be to consider the viability of serving a “non-fault-based” Notice on your tenant, pursuant to Section 21 of the Act. This form of Notice would require you to give the tenant at least 2 months to vacate. If they failed to do so, you would be entitled to issue possession proceedings at Court in order to seek a possession order. Unlike with a Section 8 Notice, the Judge would essentially have no option but to grant you a possession order, provided that they were satisfied that you had fulfilled all the pre-requisites for serving such a Notice, the form and content of the Notice were correct, and the Notice had been validly served on the tenant.

I own the long lease of a flat in a block which I would like to extend. What are my options? 

There are two main routes to extend your lease – statutory and voluntary.  The statutory route is governed by the Leasehold Reform, Housing and Urban Development Act 1993. There are pros and cons to each one and much will depend on your own individual circumstances as you may not meet the requisite criteria for using the statutory route to extend your lease and will need to rely on the voluntary procedure.

A neighbouring landowner says we cannot build more than one house on our development site. What can we do about this restriction?

This question raises complex land law issues. Occasionally, owners will enter into an agreement to restrict the way other, neighbouring owners use their property, for the benefit of the other owner. This is known as a ‘restrictive covenant’.

Restrictive covenants are often said to ‘run with the land’ meaning that they can sometimes be enforced by successive owners. When faced with a restrictive covenant to which you were not an original contracting party, the first thing to check is whether the restriction is binding on you as a successive owner. Certain legal criteria must be established for a restrictive covenant to bind successive owners.  If the restrictive covenant is binding, it may be possible to negotiate a complete release or a variation of its terms. It may also possible to obtain indemnity insurance to protect against the risk of a person with the benefit of a restrictive covenant seeking to enforce it. If neither of these options are possible, there is a process by which a Court can modify or discharge a restriction. However, this is only available in certain circumstances and only if certain statutory grounds can be established.

A third party is using part of our land as an extended garden without our permission. What are the risks of not taking action?

In these circumstances, you run the risk of allowing the third party to acquire rights over your land. Depending on the circumstances, it is even possible for the third party to acquire ownership of your land. If you suspect someone is using or occupying your land, we recommend that you seek legal advice so that appropriate steps can be taken to protect against these risks.

We have been using a private road to access our land for many years. Can the owners of the road now stop us doing do?

It depends. If you have an express right of way, known as an easement, then the owners of the road are unlikely to be able to stop you. Even if you do not have an express right of way, it is sometimes possible to acquire a ‘prescriptive’ right of way as a result of your use of the road over an extended period. Certain legal criteria must be satisfied before a prescriptive right can be established and therefore it is important to seek advice about this.

A developer is building on adjacent land which will reduce the light to some of the rooms in our house. Can we stop this?

Potentially. Enquiries should be made to establish whether your property benefits from a ‘right to light’ easement. This is a right for a landowner to receive light through a defined opening (e.g., windows) in buildings on their land. Therefore, if the neighbouring development causes a reduction in the amount of natural light received by the rooms, this may amount to a breach of your right to light easement, and you may be entitled to stop the building or claim damages. This will depend on a variety of factors, including the severity of the reduction in light and the nature of the room(s) in question. Specialist advice should be sought.