What to do if your Landlord breaches the terms of your lease
Posted:16th June 2023
Commercial leases and Business Tenancies specify the terms and conditions of renting a commercial property between landlords and tenants. There may be instances where the landlord fails to comply with their obligations (also known as covenants) which can cause unnecessary problems for you and your business.
When a landlord fails to comply with their obligations, they may be in breach of the terms of your lease/business tenancy. Common examples of a landlord breach are :-
Lack of Property Maintenance
If a landlord fails to maintain the property, such as not repairing a leaking roof or plumbing issues, it can create an unsafe and unhygienic environment for the tenants. This can be especially frustrating when you are trying to run a business and it may even affect your work or your customers. As a result, you could suffer reputational or monetary damage.
Non-Payment of Utility Bills
Landlords are responsible for ensuring the supply of certain services and utilities, such as electricity, water, and gas. If they fail to pay these bills or cut off the supply, it can significantly impact the tenant’s business operations.
The proper legal process for eviction involves giving notice, obtaining a court order or exercising a forfeiture clause. It amounts to an unlawful eviction and a breach of the lease if a landlord does not follow the correct processes.
Altering the Property Without Permission
If a landlord changes the use of the property without seeking permission from the tenant or makes alterations that infringe on building regulations, this could also be a breach of contract.
Tenants have significant protections against these breaches if the Landlord and Tenant Act 1954 covers their commercial lease.
Steps to Take When a Breach Occurs
Write to the Landlord
The first step to take when a landlord breaches the terms of a commercial lease is to write to them and try to resolve the issue amicably. You may also be able to follow their complaints procedures which might be found on their website or set out in the tenancy agreement itself. Alternatively, you could ask them what their formal complaints procedure is.
Consider Alternative Dispute Resolution Options
If a landlord refuses to co-operate or does not respond to the complaint, a tenant can consider alternative dispute resolution options, such as mediation, negotiation, or arbitration.
Alternative Dispute Resolution (ADR) is a method of resolving disputes between two parties without going to court and therefore can be less invasive, expensive, and time-consuming. With ADR, the parties typically meet with a neutral third party, such as a mediator or arbitrator, who helps them to resolve the dispute. They are encouraged to discuss the issues in detail and explore possible solutions that suit both parties.
One of the main advantages of ADR is that it often preserves the relationship between the landlord and tenant and often they can continue to maintain their business relations, as the parties are encouraged to work together to find a mutually acceptable solution. If the parties reach an agreement, it is recorded in writing and becomes legally binding. If the parties do not agree, they can escalate the matter to court.
Go to Court
If alternative dispute resolution fails, tenants can take their case to court and claim damages or get a specific performance order. A specific performance order is a legal remedy where the court orders the landlord to fulfil their obligations under the lease.
When claiming for breach of contract, tenants can seek to recover their losses. Losses could include loss of profits, expenses incurred such as having to pay for a handyman to fix a problem that the landlord should have fixed, or any other related losses such as medical treatment if the building was in a state that caused an injury for instance. They can also claim damages. Damages are monetary sums a court orders a landlord to pay to a tenant to compensate them for their losses suffered as a direct result of the breach of lease. The aim is to put a tenant back into the position they would have been in but for the breach.
If you would like to get in touch with our Litigation & Disputes team to discuss anything mentioned in the above article, please contact us on 0330 024 0245 or email us at [email protected]