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Unopposed business lease renewals pilot scheme

14/03/2018

HM Courts & Tribunals Service has introduced a year-long pilot scheme in relation to unopposed business lease renewals with the aim of ensuring that “all cases proceed to a final determination as smoothly and as quickly as possible”. Lodders partner and property litigation expert, Jane Senior, explains the scheme.

During the pilot scheme, which launched on 1st January 2018, all claims issued at the County Court at Central London will be transferred to the First Tier Tribunal (Property Chamber) (FTT) and will follow the new process.

“The pilot scheme is a sensible initiative to explore whether a more efficient way of dealing with unopposed lease renewals can be found” explains Jane.

“The current, standard court process is designed for more obvious disputes; a lease renewal is of a different nature in that a party will often only issue proceedings to protect its position, not because it wishes to start a court action. The pilot may lead to a change in practice whereby the parties and their surveyors engage in the renewal process earlier and thereby save themselves legal costs.”

“As the courts are so busy and many would say, under-resourced, the progress of many other claims will be delayed as a result; removing this batch of claims from the courts should, therefore, be positive for other litigants. Parties to claims for new tenancies should benefit from a more streamlined process with judges who are more familiar with property and valuation issues.” 

Advantages of the scheme

1. Cases will be determined more quickly.

2. The Judge will have more experience of commercial property matters.

3. The valuer will be able to provide constructive assistance to the judge as they will have industry experience.

4. Proceedings will not be extended for tactical reasons by either party.

Disadvantages of the scheme

1. There is limited time to get the draft lease agreed. As soon as the notice is served negotiations will need to begin.

2. If proceedings need to be issued at the last minute the 3 month postponement period does not give the parties much time to negotiate meaningfully.

3. Once directions have been issued only in exceptional circumstances will deferment be granted.

4. The standard directions do not make provision for any other disputes relating to the lease which may impact the rent detailed under the new lease.

 

To find out more about this story or for more information on Lodders’ Property Dispute Resolution services, click here or contact 01789 293259.

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To find out more about this story or for more information on Lodders’ Property Dispute Resolution services, click here or contact 01789 293259.