Property litigation on the rise

Commercial property disputes in the high court are soaring as the economic downturn bites.

Landlords and tenants rowing over subletting, service charges, dilapidations and other property-related issues were responsible for 40 cases in the high court in 2009, up from 28 in 2008.

Sweet & Maxwell, which obtained the figures, said companies were trying to cut their overheads by shedding excess office and retail space and this often put the landlord at a disadvantage, leading to a dispute and then litigation.

Subletting is a common source of friction where landlords may fear sub-market sublets will have a detrimental effect on future rent reviews and on the overall investment value of the property.  Disputes often arise over service charges, which can be particularly high in the retail sector, as tenants will scrutinise their contracts during difficult economic times.

“New Law Journal” 25.2.11