Commercial Lease Arrears

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Commercial Lease Arrears

Part 1: Pre-Litigation Process

We advise on the recovery of arrears, including but not limited to Ground Rent, Service Charges, Insurance and Ancillary Charges in relation to commercial properties.  Our pre-litigation recovery process includes letters, emails, telephone calls and trace enquiries.

The time it takes to process a claim from initial instruction will vary according to factors as to whether a response is received, whether a dispute is raised and if so how complex it is. Other factors are the time it takes the court to process court proceedings if issued and to list a hearing if required. Subject to the above, typically an undefended claim will take approximately 12 weeks from receipt of instructions to obtaining judgment.

Please note that in the majority of cases the lease will include a contractual costs clause under which the leaseholder will be liable to pay costs meaning that the costs will be recoverable. We will advise on this and in the event that there is no such clause, we will advise on your options in terms of how to proceed and costs recovery.

1 - Pre-litigation Process

Letter of Claim

  1. Setting up file, completing relevant conflict checks;
  2. Lease Review;
  3. Obtaining Land Registry Titles (where not provided);
  4. Letter of Claim (to all relevant addresses and e-mails); and
  5. Making a maximum of two telephone calls (where valid phone numbers are provided).

Charge: £250.00

Mortgagee / Guarantor

If the Letter of Claim fails to generate a response/payment and there is a Mortgagee or Guarantor, we will issue letters to them requesting payment.

Charge: £250.00 per letter

If the arrears are not paid after the steps set out above have been completed, we will advise as to options available to you.

If the arrears are not paid after the steps set out above have been completed, we will advise as to options available to you.

2 - Dispute / Negotiations

If a dispute is raised following either LBA, or negotiations are entered into, these will be dealt with by the Litigation Disputes Team. We shall inform you if a dispute is received and advise as to the same.

Charge: Hourly Rates per below:-

Grade Hourly Rates
Grade A: Solicitor / Legal Executive (over 8 years’ experience) £225.00
Grade B: Solicitor/ Legal Executive (over 4 years’ experience) £190.00
Grade C: Solicitor / Legal Executive (under 4 years’ experience) £160.00
Grade D: Trainee Solicitor / Paralegal £125.00

3 – Individual Insolvency & Companies House Checks

We shall complete the:

  1. Individual Insolvency Check upon the expiry of the Letter of Claim; and
  2. Companies House Check upon the expiry of the Letter of Claim.

Charge: £50.00

If the Leaseholder(s) is/are subject to the above, we shall advise you and seek your further instructions as to whether you wish for us to contact the relevant appointed person on your behalf. If you instruct us to continue with the file on this basis, these will be dealt with by the Litigation Disputes Team.


Charge: Hourly Rates as set out above.

4 – County Court Proceedings

If either payment or a response is still not forthcoming, subject to our advice and your instructions, we will proceed to issue County Court Proceedings, the charge for this is between £247.50 and £1000.00 dependant on value of claim and complexity.

In addition to our costs, the County Court Issue Fee is also payable, on a sliding scale set by the Court* as follows:

Value of Claim Court Fee MCOL
Up to £300 £35.00 £25.00
More than £300 but not more than £500 £50.00 £35.00
More than £500 but not more than £1000 £70.00 £60.00
More than £1000 but not more than £1500 £80.00 £70.00
More than £1500 but not more than £3000 £115.00 £105.00
More than £3000 but not more than £5000 £205.00 £185.00
More than £5000 but not more than £10000 £455.00 £410.00
More than £10,000 but not more than £200,000(NB: MCOL Issue limit is £100,000) 5% of the value of Claim 4.5% of the value of Claim
More than £200,000 £10000.00

*These figures are set by the Courts and are subject to periodical increase.

If the matter becomes defended our hourly rates set above will apply and the average range of costs that can apply to such proceedings is typically between £1,000.00 to £5,000.00.

These are the costs for a standard claim in the Small Claims Track of the County Court. More complex cases, for instance cases that exceed the Small Claims Track jurisdiction, are likely to result in higher costs. Other examples of situations where costs are likely to be higher include cases where interim applications to court need to be made, a larger number of witnesses are required to give evidence, there is a large volume of documents to be processed  or perhaps in a case where expert evidence is required. In these circumstances we will provide a specific estimate of the costs likely to be incurred. Where appropriate we may be prepared to agree fixed costs on a case by case basis.

Other disbursements that may be incurred are:-

  • Land Registry fees for copy documents – £20.00
  • Court hearing fees – £35.00 to £335.00 in the Small Claims Track currently depending on the value of the claim (higher fees will apply to a fast track or multi track claim)
  • Advocate’s fees – normally in the region of £185.00 plus vat to £400 plus vat (although may be higher depending on advocate to be instructed and level of complexity of the case.

5 - Enforcement

Once Judgment has been entered, we will review the matter in full and advise you as to the enforcement options available to you, together with their associated costs.

Also it should be noted that there may be other options available to you such as peaceable re-entry or possession proceedings. We will advise on options and costs as appropriate in this regard.

NB: Unless otherwise stated, costs and disbursements shown are exclusive of vat where payable.


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