Commercial lease disputes are disagreements between tenants and landlords. What worries people involved in these disputes is that they can result in lengthier and more expensive conflict-resolution processes, usually as a result of their complicated lease agreements. That said, there are effective strategies you can take to prevent and deal with these disputes.
Read on to learn more about commercial lease disputes: what causes them, how they can be resolved out of court, and when to contact a lawyer for guidance.
These steps will help you to avoid the potential consequences of commercial lease disputes, such as sky-high legal expenses.
What Causes Commercial Lease Disputes?
Relationships between tenants and landlords can be damaged by disputes arising from issues surrounding the lease agreement. Common commercial lease arguments include:
- Nonpayment of rent or common area maintenance (CAM). This is one of the most common reasons for litigation.
- Maintenance and repair cost responsibility. If there is ambiguity over who is responsible for repairs and maintenance, this can cause disagreements.
- Indemnification. The commercial lease should clarify indemnification, such as for third parties.
- Early lease termination. If one party wants to terminate the lease early, the other party might be upset that they haven’t fulfilled their obligations.
How Can You Prevent a Commercial Lease Dispute?
By following some important tips early on in your agreement, you can prevent commercial lease disputes from affecting you.
Draft a Clear, Legal Commercial Lease
When writing up the commercial lease, you should check that it outlines all the important clauses you need for a successful working relationship. This includes party responsibilities and payment schedules.
Since many disputes arise from lease misinterpretations, you should have your contract reviewed by an experienced lawyer.
On ContractsCounsel, an online legal marketplace that connects lawyers with clients for drafting and reviewing agreements, you can hire a vetted lawyer who can help you. They’ll review all the clauses and ensure they’re clear and easy to understand, without any ambiguous terms.
Include Dispute Resolution in the Contract
Your contract needs to have a dispute resolution process that will come into effect if a dispute arises between you and the tenant or landlord. It’s important to ensure this is legally enforceable and transparent to prevent litigation in future.
Have a Schedule of Condition
At the start of the agreement, draft a schedule that outlines the condition of the property. This prevents misunderstandings between parties and outlines how maintenance and repair responsibilities are governed, reducing confusion surrounding these issues.
How Should You Deal with Commercial Lease Disputes?
When you find yourself in a dispute over your commercial lease, you should do some things right away to prevent escalations and avoid going to court.
Review your Commercial Lease
Refer back to your agreement so that you understand everything outlined. This document will include important information about your responsibilities and rights. It also looks at what actions under the agreement are allowed, versus ones that are not, which will help you define your position and explore the most appropriate dispute-resolution options.
Negotiate with the Other Party
One of the best ways to deal with a dispute is to reach out to the other party in good faith. Understand that many disputes result from misunderstandings, such as if you have different ideas of what the agreement clauses and terms mean.
When meeting with the other party, strive to be honest, friendly, and empathetic. Although you want to be professional, being kind to the other party will help you both express your concerns and find a solution to the problem in a constructive way, without spending lots of money on litigation.
Keep a Written Record
Whenever you deal with the other party or you engage in follow-up emails, you should document it all in writing. This ensures you both are on the same page about resolution strategies. It can also help you if you do have to take the dispute further.
Consider Mediation
It can sometimes help to get a neutral third party to oversee the dispute, such as a mediator. This person will listen to both parties’ concerns and help you to find a solution to the problem. Many people like mediation because it’s less time consuming and expensive than legal proceedings.
It’s often the case that courts prefer for parties in a dispute to consider non-formal resolution processes before seeking arbitration. The benefit is that the dispute could be resolved in a much less stressful manner.
What if Informal Strategies Don’t Work?
If you’ve tried to communicate with the other party but you can’t seem to reach an agreement in an amicable way, you should consider more formal strategies. These include the following.
Arbitration
This is when you hire an arbitrator who will listen to both parties and then make a final decision about how the dispute can be resolved, such as if one party has to pay penalties to right the situation. While arbitration is more formal than mediation, it’s useful in more serious cases, such as if the issue involves a breach of the lease.
Litigation
If you can’t reach an agreement or settlement, you might need to take your commercial lease dispute to court. This is commonly seen in cases where the other party doesn’t want to negotiate or pay money they owe, or if a landlord is trying to force a tenant out of the property. Unfortunately, litigation is expensive and can take time.
Should I Hire a Lawyer?
You don’t have to wait for the dispute to escalate or head to court before hiring a lawyer to help you. A lawyer has the expertise and legal knowledge to help you by:
- Reviewing the commercial lease to ensure that it’s legally compliant and clear.
- Advising you on the best course of action, depending on the situation and your legal position.
- Representing you if you take the dispute to court.
- Negotiating on your behalf for fair settlements.
Do you need help with a commercial lease dispute?
If you seek legal assistance for a commercial lease dispute, you should post your project on ContractsCounsel. You’ll connect with experienced and vetted lawyers who will help you navigate commercial lease disputes so they don’t have to be stressful, time consuming, or costly.
