Commercial Lease Disputes UK: How to Resolve Them

What this document is

A commercial lease dispute is any disagreement between a landlord and a business tenant arising out of the terms of a commercial lease. The lease itself is a contract, and like any contract, it can be misread, ignored, or breached by either side.

The most common flashpoints I see are unpaid rent and service charges, disputes over who pays for what repairs, disagreements about subletting or assignment, rent review deadlock, arguments about whether a break clause has been validly exercised, and claims for dilapidations at the end of the term. Each of these can involve different legal routes and different statutory protections.

The Landlord and Tenant Act 1954, for example, governs security of tenure for many business tenants, while common law contract principles govern how the lease terms themselves are interpreted. Some disputes also engage specific procedures such as Commercial Rent Arrears Recovery (CRAR), forfeiture by peaceable re-entry, or the statutory pre-action protocol for dilapidations.

The point is that the right approach depends heavily on the type of dispute, how the lease is drafted, and what each party actually wants to achieve.

How to use this document

1. Read the lease properly before doing anything else. Before you send a single email, sit down with the lease and work out what it actually says about the issue. Check the specific clauses on rent, repair, insurance, forfeiture, break rights, and notices. Many disputes fizzle out once someone actually reads the drafting carefully. If the lease is silent or ambiguous, that changes your strategy entirely.
2. Open a conversation early, in writing. Pick up the phone first if you can, then follow up in writing. A calm email setting out your understanding of the issue and what you'd like to see happen is often enough to shift things. Keep the tone professional, stick to facts, and avoid making threats you're not ready to carry out. Written records matter if things escalate later.
3. Consider mediation before anyone instructs litigators. Mediation is remarkably effective for commercial lease disputes because it lets both sides discuss commercial reality, not just legal positions. A skilled mediator can often broker a deal in a single day that would have taken months through the courts. The process is confidential, and nothing said in mediation can be used in later proceedings.
4. Use the right formal procedure for your type of dispute. If it's rent arrears, CRAR or a money claim may be appropriate. If it's dilapidations, the pre-action protocol for dilapidations claims sets expectations for both sides. If it's a 1954 Act renewal dispute, the statutory timetable is strict. Picking the wrong route wastes costs and can weaken your position.
5. Treat litigation as the last resort, not the opening move. Court proceedings are public, slow, and expensive, and the costs rules in commercial disputes can be brutal for the losing side. That said, sometimes litigation is the only way to force a resolution, particularly where one party is stalling or acting unreasonably. If you go down that road, go in with clear eyes about the cost, time, and evidence you'll need.

Common questions