law 11


The fall and rise of the landlord


After the economic crisis of 2008 threw the UK into recession, landlords of commercial property became desperate to hang on to their tenants for fear of losing income. Now, as dispute resolution specialist Craig Petrie from Eric Robinson Solicitors explains, while the tentative signs of recovery are increasing business confidence, landlords would still be wise to exercise caution


The landlord and tenant relationship over the past few years has not been difficult to either understand or appreciate.


If you


own a factory, office block or retail outlet in an economic recession your worry is that your tenant will no longer be able to afford your premises, their business could collapse and there will be no one out there in the marketplace to take their place.


... the only thing that is guaranteed in a relationship that depends on the economic cycle is that, in time, the scales will tip in the favour of the other party


In these situations, the tenant has the upper hand when it comes to bargaining with their landlord. There may be reductions in rent, changes in payment terms and a landlord could overlook the occasional minor infringement of the terms of the lease if the tenant is providing a reliable income from the property.


In this


scenario, the landlord is on the back foot and subscribes to the ’beggars can’t be choosers’ philosophy.


However, the only thing that is guaranteed in a relationship that depends on the economic cycle is that, in time, the scales will tip in the favour of the other party.


From my perspective, 2014 has seen a significant change of fortune for landlords. Eric Robinson Solicitors has had an unprecedented number of cases being brought to us in the past couple of months by landlords seeking advice on how to get rid of tenants that are behind in rent or in breach of their lease.


Either landlords have had enough and are drawing a line in the sand, or they are feeling more confident and assured that they no longer have to put up with bad tenants when there are better ones out there.


In fact, I am hearing from my


colleagues that in certain sectors there is a shortage of good-quality commercial property in the Solent area.


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – MAY 2014


Shifts in the balance of power within relationships such as these usually cause disputes. Tenants will resent what they perceive as a landlord suddenly enforcing terms and conditions more forcefully than perhaps they were before, while landlords won’t put up with irritants and bad behaviour when they think they can get a better tenant.


I have had landlords come to me with the desire to terminate commercial leases for a number of reasons. Some are owed a great deal of rent, others can prove that their property has not been maintained in accordance with the terms of the lease and there have even been cases where tenants have made significant alterations to a property without requesting the necessary permissions.


Either landlords have had enough and are drawing a line in the sand, or they are feeling more confident and assured that they no longer have to put up with bad tenants when there are better ones out there


There have been more complex cases, such as when a landlord has no desire


www.businessmag.co.uk


to terminate the lease to a property, but does need to collect rent arrears and these needs a more diplomatic, sensitive, but nonetheless robust, approach.


However, while all these situations may well make a landlord feel more confident and tempt them into taking bold actions to be rid of troublesome tenants, it is worth noting that it hasn’t just been landlords who have been coming to us.


In the case of leases protected by the Landlord and Tenant Act 1954, landlords can’t just terminate an agreement without cause.


If a business has been adhering


to the terms of its lease then a landlord must satisfy one of a number of different statutory grounds if they wish to remove a tenant that has the benefit of statutory protection. For example, simply wanting to remove an existing tenant on the basis that a new tenant could probably be found who might be able to pay a higher rent would not constitute a lawful termination.


I have had a couple of instances this year where the landlord of my client has tried to evict them at the end of the lease for no good reason. The attitude of ’well I own the property, so I should be able to do what I want with it’ is, at best, naïve. The businesses which operate within premises have legal rights as tenants that cannot be ignored.


... simply wanting to remove an existing tenant on the basis that a new tenant could probably be found who might be able to pay a higher rent would not constitute a lawful termination


In dispute resolution, I am constantly reminded that, whether you are the landlord or tenant, all either party wants is to run a good business. A lot of this hinges on good communication and mutual understanding, but in the event that the relationship does break down or either party breaches their agreement, the team at Eric Robinson Solicitors are highly experienced in getting things back on track and making sure that a property is working as a productive investment.


Details: Craig Petrie 023-8021-8048 craig.petrie@ericrobinson.co.uk www.ericrobinson.co.uk


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