Dealing with commercial lease disputes can be a huge burden – emotionally, mentally, and financially at the same time. A business may be facing unexpected service charges, delayed works, access issues, disputed invoices, handover problems, or costs that seem to appear without warning.
In my experience, however, the issue that feels most unfair is not always the strongest legal argument.
When I advise on commercial lease disputes, I usually start in one place: the lease itself. Before forming a view on what has happened, I want to understand what the parties actually agreed, when liability began, how charges are calculated, what notices are required, and whether the contractual process has been followed throughout the documentation.
English courts will generally give effect to what the parties agreed, even where the outcome appears harsh. In Arnold v Britton [2015] UKSC 36, for example, the Supreme Court enforced a service charge clause that produced an eye-watering financial result because the natural meaning of the wording was clear. Commercial common sense did not rescue a party from a bad bargain.
That is why, strategically, the value in a dispute lies in separating frustration from leverage. Here’s how I approach this with my clients.
Commercial lease disputes are usually decided by the detail
Commercial property law is highly fact-specific. The wording of the lease matters. So does the timing of liability, the calculation of charges, the notice provisions, the evidence available, and whether the contractual machinery has been properly followed.
A tenant may have a genuine commercial complaint. But the strongest legal point may be much narrower. It might be a calculation error, a missed cap, a demand issued in the wrong accounting period, or a step in the lease mechanism that was not properly taken.
A broad complaint may explain why a business feels wronged, but it will not always create legal or negotiating leverage. A precise, contract-led point often carries far more weight.
My role is often to help clients identify which points in a dispute are legally strong, which are commercially relevant but practically weaker, and which may distract from the best route to a practical outcome. The distinction matters.
Service charge disputes in commercial leases
Service charge disputes are one of the most common areas of tension. I often see businesses focus first on whether the bill feels too high.
That is understandable, but it is not usually the best starting point. A high service charge bill is not automatically an unlawful one. Equally, a bill being demanded does not necessarily mean every element is recoverable.
The question comes back to what the lease allows.
One important point to bear in mind is that the statutory “reasonableness” protections in sections 18 to 30 of the Landlord and Tenant Act 1985 apply to residential leases, not commercial ones. In a commercial lease, your main protection is contractual. It comes from the wording of the lease itself.
For RICS regulated managers, the RICS professional statement on Service Charges in Commercial Property also sets standards around transparency, apportionment and timely certification.
When a service charge demand feels wrong, I would usually suggest looking carefully at:
- What accounting period the demand relates to;
- Whether there is a service charge cap;
- How annual increases are calculated;
- Whether the landlord or managing agent has followed the process required by the lease;
- Whether there is a certification clause;
- Whether the tenant is challenging liability, calculation, or both.
Certification clauses need particular care. In Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2, the Supreme Court held that a landlord’s certificate could be conclusive as to the sum payable, subject only to manifest or mathematical error or fraud, even though the tenant could still dispute underlying liability afterwards.
In practical terms, some leases can create a “pay now, argue later” position. Knowing whether your lease does that changes the whole strategy.
Verbal assurances and commercial lease variations
Commercial lease disputes rarely appear out of nowhere. The warning signs have usually been there for a while.
There may have been informal assurances from a landlord or managing agent. A delayed handover. A disputed invoice. Unclear responsibility for works. A conversation that seemed productive at the time, but was never properly recorded.
I would always be cautious about relying on verbal assurances in a commercial lease context. That helpful phone call with a managing agent may be worth very little when the position becomes disputed.
Most modern commercial leases contain a “no oral modification” clause. Since Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24, those clauses are fully effective. An oral agreement to vary the lease will usually have no contractual force unless it is recorded in writing and signed in the way the lease requires.
This is why I place real importance on how a business records its position. Short, carefully worded correspondence can make a difference. It can reserve your position, ask the right questions, avoid accidental admissions, and create a clearer evidential trail if the dispute develops.
If a business is relying on an assurance, variation, concession or agreement, I would suggest getting it properly documented. Sensitive negotiation correspondence may need to be marked “without prejudice” where appropriate.
Early advice is not about making every issue contentious. It is about protecting the strength of your position before you need it.
Negotiating a commercial lease dispute without unnecessary escalation
The strongest commercial lease negotiations are usually focused, evidenced and realistic.
From my perspective, the first strategic task is to separate the points that explain the client’s frustration from the points that create real legal and commercial leverage. That becomes the strongest, tactical response.
A well structured response should make clear:
- What is disputed;
- Why it is disputed;
- What the lease says;
- What evidence supports the position;
- What practical resolution is being sought.
This helps avoid unnecessary escalation. Push too hard on a weak point and you risk losing credibility. Identify and evidence the strongest points and the conversation becomes sharper.
There are also cases where a formal settlement offer may be appropriate. A properly framed Part 36 offer under the Civil Procedure Rules can shift costs, risk. and concentrate minds. That can be useful leverage, but it needs to be used carefully and with a clear understanding of the dispute.
My usual advice is this: lead with your strongest contractual point, not your longest list of complaints. And seek advice early if you need help identifying those points.
Commercial lease advice is business risk advice
A commercial lease is not just a property document. It affects cash flow, operational readiness, expansion plans, compliance obligations, risk exposure and business continuity.
That is why I see commercial lease advice as business risk advice.
The detail matters before the lease is signed. When does liability begin? Which future costs can the landlord recover? What works are required? Who is responsible for repairs? What happens at the end of the term? Having those answers matters if problems do ever arise.
For example, on a full repairing lease, a tenant’s exposure at the end of the term will be shaped by the repairing covenants. However, any damages claim for disrepair is capped by section 18(1) of the Landlord and Tenant Act 1927 at the diminution in the value of the landlord’s reversion. Knowing that early can change how a business negotiates, records the condition of the premises, and manages risk from day one.
For businesses in complex or regulated environments, having experienced commercial property support available when it is needed can make a real difference. Decisions can be made faster, with a clearer view of risk, stronger records, and a more practical route through any dispute.
Commercial property law is never just about the property. It is about protecting the business that depends on it.
Need advice on a commercial lease dispute?
If your business is dealing with a service charge dispute, delayed works, access issues, unexpected costs, a landlord and tenant disagreement, or uncertainty around your commercial lease obligations, the first step is to understand exactly what your lease says.
I help businesses identify the strongest legal position and pursue practical, commercially focused outcomes.
Where reserved legal work is required, I undertake this through one of the authorised firms I consult with.
To discuss commercial property support for your business, contact suezanne@skinglegal.co.uk.