Property Litigation

If you are involved in a dispute over real estate or property, you may need legal advice from our property litigation teams.

BBS Law’s litigation lawyers advise on all aspects of property and real estate disputes, for both commercial and residential properties.

We have a diverse portfolio of clients and can assist with all aspects of landlord and tenant litigation, or in any property dispute. We approach all disputes proactively and pragmatically, aiming to resolve disputes or achieve our clients’ needs by negotiating, mediating, or litigating, depending on the facts and circumstances of each case.

Whatever the nature of your property dispute, our specialist property team offer an experienced and cost-effective service.

What Does Property Litigation Involve?

Property litigation involves a range of legal issues, but encapsulates revolving disputes that are related to real estate property. This could include disputes between landlords and tenants, ownership or lease dispute on agreements; it can also involve larger scale disputes such as property rights or development and construction.

Our property litigation teams can help you with the likes of court proceedings, negotiations, mediation, arbitration, and other forms of dispute resolution, all with the aim of solving issues swiftly and professionally.

Types of Disputes Handled in Property Litigation

Property litigation encompasses a diverse range of dispute resolution. Commonly, the kind of disputes included under the umbrella of property litigation are landlord-tenant disputes, which may involve issues such as non-payment of rent, lease violations, eviction proceedings, or disputes over maintenance and repairs.

Boundary disputes are another commonality, arising when property owners disagree about the location or ownership of property. Other types of disputes may involve breaches of contract, disagreements over property titles, disputes regarding easements or rights of way, disputes between co-owners or neighbours, and challenges to property development or planning permissions.

Whatever it is, we aim to ensure that it results in an organised dispute resolution with our help.

Legal Assistance for a Break Clause for Commercial Leases

Often, a commercial Lease will include a break clause allowing the tenant or landlord to terminate the Lease early.

Depending on how the Lease is drafted, the right to exercise the break clause may arise on a specified date or it may be exercisable at any time during the term on a rolling basis.

It is common for a break clause to be conditional. For example, a tenant may have to perform certain obligations to exercise the right of the break clause.

Failure to meet the conditions may mean that the Lease continues and the tenant has ongoing liabilities associated with the Lease.

Adhering to the conditions of the break clause can be extremely strict, and can impose time consuming and financial liabilities on the tenant. One example of a failure on behalf of a tenant to meet the strict requirements of a break clause, and where the Court held that the tenant had not complied, was the almost ludicrous fact that the tenant had applied two layers of paint as opposed to three as stipulated in the Lease.

The court’s insistence on extremely strict compliance with the requirements of a break clause demonstrates how important it is to keep fully aware of the terms of the break and any time limits that may apply. Given the significant sums that may be involved it is imperative that both landlords and tenants take legal advice on their rights and obligations.

Further examples of common conditions found in break notices are:

• Service of the break notice; these need to be complied with to the letter. If the Lease provides that the notice should be served on green paper, white paper will not do!
• A requirement that the notice is served at a particular address by a specific person.
• Payment of all sums due, including rent, service charge, break premium.
• Compliance with all the covenants in the Lease.

We can advise on any break notice claims you may have. The starting point will be to consider the terms of the Lease and an assessment of the factual position. We will work with you to determine the next steps and seek the most appropriate resolution for you, be this through settlement or formal litigation through the court.

How Long Does Property Litigation Typically Take to Resolve?

Unfortunately, there is no way of determining the length of time that it would take to resolve commercial or residential property disputes. Property litigation matters that can be solved swiftly if settlements are reached, can also go on for a some time, some even years before a solution is found and both parties reach an agreement.

Nonetheless, this is dependent on the situation at hand and can change dramatically on a case by case basis. That being said, it is important to consult legal help from the likes of us at BBS Law for guidance on property litigation matters so you can better understand your options.

Property Litigation: What You Need To Know

#1 Commercial Rent Arrears (CRAR)

Commercial rent arrears recovery (“CRAR”) replaces the old common law doctrine of distress. It allows a landlord to recover rent arrears by seizing the tenant’s goods and holding or selling them.

Under the old rules of distress, landlords had the right to catch tenants by surprise since no prior notice or court order was needed. This was an effective tool for landlords, and meant that tenants could not effectively hide and put assets out of the landlord’s reach. Under the CRAR regime, landlords are required to follow a stringent process and adhere to strict procedures.

When can CRAR be used?

CRAR can only be used to recover principal rent together with any associated VAT or interest. It does not apply to services charge, rent premiums or other outgoings. Even before CRAR can be exercised, there needs to be a minimum rent arrears period equivalent to seven days’ rent. It is important to note that initiating CRAR may mean the landlord has waived its entitlement to pursue an alternative remedy, such as forfeiture.

Tenant’s right to appeal

The tenant has the right to apply to the court for an order that no further steps may be taken under CRAR without further permission of the court.

Is CRAR the right procedure for you?

CRAR can apply be exercised by the immediate landlord under a lease and only applies to a property that is wholly commercial, meaning it cannot be a mixed-use property. Any goods owned by the tenant can be seized, except work tools with an aggregate value of £1,350.00.

A landlord can still require a sub-tenant to pay directly to him for the default of the landlord’s tenant. However, this involves a separate procedure with notice requirements to follow.

We advise obtaining legal representation if you are considering initiating the CRAR procedure.

We will discuss whether this is the most appropriate remedy bearing in mind your circumstances and aims.

Service Charge Collection

It is usually the responsibility of a landlord, management company or management agent to collect service charge from leaseholders, ensuring the efficient running of the property. When a leaseholder is not paying service charge, we understand that the pressure from creditors who have supplied services to the property and cash-flow issues can be a worry.

Like any other debt collection procedure, formal litigation is not always the best avenue to proceed. We will liaise with the debtor, mortgage providers (if one) and any other third parties to seek a cost effective and speedy resolution. If the matter does not reach a resolution, court proceeding may be necessary and we will represent your interests throughout.

In any event, the process of collecting unpaid service charge can become complicated and protracted, and it pays to have specialist legal representation. Each case is different, but we usually follow the following procedure to put the debtor on notice that the issue is serious.

• Letter of demand to the debtor giving them seven days to pay the outstanding sums under threat of court proceedings.
• After the deadline if the debt remains outstanding, serve court proceedings and make it clear that interest and legal costs are being added to the debt.
• Obtain a county court judgment on your behalf and consider if enforcement is necessary.
• Discuss the most appropriate enforcement options with you and map out a plan of action if the debt remains outstanding.

We have the experience and expertise in service charge collection to help you recover any outstanding fees owed to you.

#2 Landlord and tenant disputes

We provide advice to both commercial landlord and tenants, and also act for management companies, property developers, investors and managers. Our team handles both commercial and residential disputes, and we seek to determine the best method for resolving disputes, be it negotiation, mediation or formal litigation.

Commercial disputes often involve:

• Commercial rent arrears recovery.
• Breach of covenant.
• Lease renewal disputes.
• Rent review disputes.
• Service charge recovery.
• Dilapidation claims.
• Break notices.
• Forfeiture.

Residential disputes often involve:

• Service charge recovery.
• Possession claims.
• Breach of covenant.
• Party wall disputes.
• Break notices.
• Forfeiture.

Being sensitive to the needs of both landlord and tenants, we will do our utmost to keep healthy relationships between both parties. In the event that this is not possible, we are dedicated to achieving the best results for our clients and are sensible regarding costs, whilst providing an excellent service in an efficient and cost-effective manner.

Our experienced team can also advise on non-contentious issues, such as reviewing and drafting leases, licences, conveyancing services and other property or portfolio needs. We have excellent market knowledge and will utilise our skills and expertise in advising you.

#3 Forfeiture

Under Section 146 of the Law of Property Act 1925, a landlord may initiate forfeiture of a lease for breaches of covenants. This means the landlord is seeking to either peacefully re-enter the property or initiate court proceedings for possession of the property. In essence, the landlord is terminating the Lease.

The lease will need to expressly state that there is a right of forfeiture and the clause will need to stipulate as to the alleged breach. A breach of the covenants in a commercial Lease may occur in the following circumstance

• Failure to pay rent.
• Dilapidations issues.
• Failure of the obligation to repair.
• Criminal activity on the premises.
• Insolvency situation.

Is there a right to forfeiture?

If the property is residential or mixed use, the right of forfeiture is conditional on receiving a court order. If an order is not sought, and re-entry takes place, the landlord may be liable for a fine or even imprisonment. Similarly, forfeiture will not be available without a court order if a tenant has fallen into an insolvency situation.

• Peaceful re-entry: This involves the landlord, bailiff or landlord’s agent physically re-entering the property and changing the locks. Entry must be non-violent and cannot be opposed. This is why it is usually conducted outside of office hours.
• Issue and service of possession/forfeiture proceedings: The Lease should determine the service of the proceedings. The Lease comes to an end only when the court makes a judgment for possession.

What is the procedure for forfeiture?

Forfeiture represents a positive and final act, and once initiated by the landlord, cannot be undone. It is important that the intention to forfeit the Lease is communicated by the landlord to the tenant. From the tenant’s point of view, the Lease has not been brought to an end until the court order, and in circumstances the tenant can enforce the landlord’s repair obligations.

Wrongful forfeiture

The landlord has to be careful that he does not initiate forfeiture before a breach has occurred by the tenant. In these circumstances the tenant can make an application to the court for damages or an injunction allowing the tenant back into the property.

Should you consider initiating forfeiture?

It is important to follow the correct procedure or the consequences for the landlord can be severe. We recommend that professional advice is sought and you aware of your rights and obligations. In some cases, a landlord can actually waive the right to forfeit. This can occur when a landlord is aware of the breach and performs an act which recognises the lease as continuing.

From a practical point of view, considerations as to whether the premises can be re-let quickly, the current business rates and the availability of alternative remedies should assist in determining what action to take.

Our Property Litigation Services

Our property litigation services include:

• Lease renewal claims
• Recovering possession of property
• Claims for disrepair and other disputes over breaches of covenant
• Service charge disputes
• Applications to the First-tier Tribunal (Property Chamber) and the Upper Tribunal
• Recovery of premises from unlawful occupiers/squatters
• Lease extensions and collective enfranchisement claims
• Acquisition of the freehold interest by leaseholders
• Disputes with owners of neighbouring properties over boundaries, easements (e.g. rights of way) trespass, nuisance and adverse possession
• Possession and rent recovery for assured, assured shorthold and protected Rent Act tenancies, including serving notices under section 8 and section 21 of the Housing Act 1988
• Deposit disputes
• Advice on rent review
• Claims of disrepair
• Tenancy surrender negotiations
• Disputes over financial interests in property (Trusts of Land and Appointment of Trustees Act 1996)
• Mortgage disputes
• New lease renewal claims
• Solicitor and surveyor professional negligence claims relating to property
• Property related insolvency including LPA Receiverships