How to navigate landlord-tenant disputes in commercial real estate

On Behalf of | Feb 6, 2024 | Business Disputes, Real estate disputes |

Disputes between commercial landlords and tenants can be complex, with significant financial implications. They also can be disruptive to conducting business and harm a professional reputation. While they may be unfortunate in commercial leasing, the problem can be effectively managed with the right strategy.

Regardless of whether the client is a landlord or tenant, the first step to addressing the issue is conducting a thorough review of the lease agreement. This document is the business relationship’s cornerstone and provides guidelines for resolving a dispute when problems arise. A real estate law attorney can provide insight into the contract’s terms for provisions related to dispute resolution, including arbitration clauses, which may dictate how to address the conflict. Understanding your rights and obligations under the lease is critical, as this will inform your strategy moving forward.

Considering Arbitration Clauses

Many commercial leases include an arbitration clause, which requires the parties to resolve their disputes through arbitration rather than litigation. Arbitration is often regarded as a faster and less costly alternative to court proceedings, offering a more private resolution method. However, it’s important to note that arbitration decisions are typically final and binding, with limited grounds for appeal. An attorney can examine the specifics of the arbitration clause, as it may set out the rules for selecting an arbitrator and outline the arbitration process. Knowing the details will help assess whether it is the most favorable option for your situation.

Weighing Court Litigation

If your lease allows it or arbitration is not mandatory, a client may consider taking their dispute to court. Litigation can provide a more formal setting and the opportunity for an appeal if necessary. The discovery process in litigation can also compel the disclosure of evidence that might not be available in arbitration. Still, it’s imperative to weigh the pros and cons of litigation by working with an experienced litigator who can provide counsel on the likelihood of success and the potential impact on your business.

Strategic Dispute Resolution

When facing a dispute, it’s essential to start by communicating with your landlord or tenant to reach an amicable resolution. If that fails, the two sides may turn to the lease agreement guidelines. Attorneys with experience in real estate law and litigation can guide clients through the process, helping them navigate the complexities of the dispute while also considering the client’s business interests.

Understanding your lease agreement, assessing your dispute resolution options, and implementing a strategic approach are critical steps in navigating these challenges. Early legal guidance can prevent unnecessary disputes from escalating and help maintain your business continuity. It also better positions the client for success if the case ends up in court.