Litigation and Business Representation

A commercial landlord-tenant lease is typically a complex agreement that is expected to remain in place for years, even decades. Not surprisingly, landlord-tenant disputes are not uncommon given the numerous and varied factors that can impact a commercial lease agreement. The COVID-19 pandemic is an excellent example of how unforeseen and uncontrollable factors can strain the commercial landlord-tenant relationship to the point where litigation appears inevitable. Instead of heading to court, however, mediating your landlord-tenant dispute may be a less expensive alternative and more effective alternative.

Unlike their residential counterparts, commercial lease agreements are often the result of fine-tuned negotiations between the parties resulting in a lease agreement that is unique to the needs of both the landlord and the tenant. For instance, commercial tenants may negotiate for the landlord to pay for improvements to the property that fit the needs of the tenant while commercial landlords may want a tenant to be responsible for maintenance and upkeep of the property. Given the lengthy duration of most commercial leases, disputes between the landlord and tenant do occur, including:

• Monetary disputes
• Breach of contract
• Maintenance and repair disputes
• Liability disputes
• Assignment/subletting issues
• Renewal options

Before you can decide if mediating your landlord-tenant dispute is the right choice, you need to understand what is involved in mediation. A popular form of Alternative Dispute Resolution (ADR), mediation occurs outside a traditional courtroom. Ideally, mediation occurs before a traditional lawsuit has been initiated; however, it can also help resolve a dispute that is already being formally litigated. Both parties help select the neutral mediator and share equally in the cost of mediation. A mediator does not evaluate the merits of the case nor does the mediator offer advice or make decisions. The sole role of a mediator is to bring the parties together to try and resolve the dispute in a way that satisfies both parties and avoids the need to pursue (or continue) the traditional litigation route. One of the best things about mediation is that if it is not successful, traditional litigation remains an option.

It can take months, if not years, to litigate a landlord-tenant dispute in the judicial system. For a commercial landlord, that can mean the property is not producing income while the lawsuit is pending. For a commercial tenant, the business enterprise operating out of the property may suffer a reduction of income or be completely shut down. Meanwhile, both parties are racking up considerable expenses litigating the dispute. Mediation offers a better option for several reasons, including:

• Mediation can resolve the dispute quickly. Instead of slugging through the traditional litigation process and waiting for a court date that may (or may not) lead to a resolution, mediation offers a way to quickly resolve your dispute. Mediation can occur at any time prior to or after filing a lawsuit and can be arranged relatively quickly. If the parties reach a mutually agreeable settlement, the dispute is resolved without the need for protracted litigation.
• Mediation keeps expenses down. Traditional litigation typically comes with hefty legal fees for both parties – and the risk that you will be ordered to pay the legal fees for the other party in many cases. Mediation, on the other hand, is considerably less expensive and the cost is split equally among the parties.
• Mediation is a “no risk” proposition. Studies have shown that mediation is a highly effective way to resolve legal disputes, making it an attractive alternative to traditional litigation. Moreover, there is no risk in trying mediation because unlike arbitration (another popular form of ADR), mediation is not binding. The parties must agree to a settlement. If an agreement is impossible, traditional litigation remains an option.

The COVID-19 pandemic has hit commercial landlords and tenants particularly hard. Landlord-tenant disputes arising because of the pandemic are perfect examples of why mediation should be considered before pursuing traditional litigation. The unprecedented nature of the pandemic caused commercial tenants to suffer financial losses or shut their doors permanently. Commercial landlords lost rental income and/or were forced to implement government-imposed restrictions or recommendations that impacted the tenant’s use of the property. Litigating a landlord-tenant dispute related to COVID-19 using the traditional justice system may require a judge to interpret and apply a maze of local, state, and federal laws to a uniquely new set of circumstances, almost certainly extending the time and increasing the expense of litigating the dispute.

If you are dealing with a commercial landlord-tenant dispute that threatens to turn into litigation, consider mediation as a cost-effective and time-saving alternative. Our experienced landlord-tenant mediation attorneys have the experience and knowledge necessary to mediate your dispute and help you reach a favorable agreement that resolves all issues.