Thought Leader – Property Litigation – MacRoberts LLP
The realm of property law can span a vast number of property types, but most litigation matters revolve around real estate property and the complexities therein. Property litigation deals with disputes surrounding ownership, investments, and at times the function and maintenance of a property, whether it be residential, commercial, industrial, or agricultural.
Detailing the UK’s evolution in property litigation over the years, and how MacRoberts LLP, a Scottish sector-based law firm, unfolds particular litigation scenarios, is Gillian Craig, a Partner in the firm’s Commercial Dispute Resolution team.
How has the UK Property Litigation arena evolved since you joined MacRoberts in 2002?
Back in 2002, property litigation was not particularly recognised as a standalone specialism in Scotland, although it was already well established in England. At that time, in the property boom, typical actions would include sellers trying to elide missives due to more attractive offers being received post- completion. Dilapidations wasn’t a particularly active area due to the buoyant letting market. However, come the crash, property litigation really flourished, enforcing missives against purchasers, advice in relation to insolvent tenants, and a real surge in dilapidations cases – given the late-eighties leases reaching their ish – and a real focus on lease end repairing obligations in the absence of new tenants willing to take on FRI leases on any terms. The evolution in title conditions (and improvement in the development sector) has led to an increase in Lands Tribunal applications and, of course, environmental legislation and how it fits into all of this.
What would you say might be the atmosphere in the UK property segment throughout 2017, especially on the back of the recent Brexit vote?
I’ve seen a very mixed picture. Traditional institutional lenders are cautious, particularly in the regions. Whereas entrepreneurial funders see a real opportunity, particularly in purchasing assets the traditional lenders – for political and strategy reasons – are selling. I’ve seen some efforts to wriggle out of concluded missives in light of a Brexit concern but, to be honest, that has dissipated.
Can you detail the strategies and challenges of one of your most recent property litigation cases, and how you applied thought leadership to this scenario?
Sometimes we can get caught up in new developing areas of law that old principles are overlooked. In a recent dilapidations case it transpired that there was a good argument that the landlord had inadvertently renounced the lease, with the possibility that all claims under the lease had therefore been extinguished. It’s not a point that has been tested in Scotland for a number of years.
Other issues arise in relation to landlords gaining possession of demised premises at very short notice (e.g. where a lease and sub-lease terminate on the same day, but the sub-tenant refuses to remove, putting the mid-landlord in a very difficult situation). The court rules do not readily accommodate this, and as a result of this I’ve had to be creative; whether it be actions for recovery of possession or interim orders for possession in the Court of Session, which don’t quite fit the bill but can be manipulated to a degree. This is something that I am hopeful the drafting committee will pick up at some stage in the new Simple Procedure rules, and it is certainly something I have lobbied them about!
You are also experienced in arbitration and mediation; how often can these be applied to property disputes and what are the benefits in your opinion?
Arbitration typically comes up due to the fact that most commercial leases will have an arbitration clause. In my experience, service charge and dilapidations disputes are well suited to arbitration if the arbitrator is a building surveyor. Equally, mediation is a great forum for dilapidations disputes, purely because courts are not an ideal forum for going through the minutiae of a Scott schedule, if nothing else, due to the incredible expense involved.
What I do find surprising is that, notwithstanding the prevalence of expert determination in leases, be it overtly or covertly (e.g. certification of service charge or dilapidations) there is very little challenge or case law in the area. I’ve been vocal in warning the surveying profession of their duties and exposure in this area.
As with all litigation, you must be mindful of cost; it’s an expensive undertaking. The area is usually therefore well suited to mediation, where creative remedies can be found. Certainly, in my experience, dilapidations disputes are very well suited to mediation.
As a thought leader, how are you currently working towards developing or implementing said legislation, or any other directives in this sector?
I am a committee member of the PLA and we are actively trying to become involved in contributing to procedure rule change.
