Case study 1: Dispute with Landlord
An FSB member operated a garage for the motor trade. The member was a commercial tenant involved in a dispute with their landlord who alleged that they failed to maintain/repair the property as required by terms of the lease.
Background
The member initially entered into a verbal lease in 1998 but no formal lease was entered into and over the years the property had been sold. The member attempted to enter into a formal lease following the sale of the property in 2016 and a formal lease was drawn up by solicitors but never completed as the landlord had to obtain consent from their lender for the lease to be finalised which didn’t happen (the incomplete lease). The property was then sold again so another landlord took over. The member continued to pay rent quarterly, but the new landlord failed to provide the insured with a VAT invoice, despite numbers requests which prevented the member re-claiming VAT as you can only do so after a period of 3 months from the date VAT is paid. The member therefore stopped paying rent. Shortly after the landlord served a section 146 noticed on the tenant for failure to conduct repairs to the property, such as windows, painting, repairing roller shutter, remove litter and equipment on the outskirts of the property etc. If these works were not carried out the landlord was going to exercise their right under forfeiture.
The claim
The member contacted us for assistance in dealing with the above. The claims team verified the members membership, assessed the details provided and confirmed that there was potential cover under the policy. The case was then referred to the panel solicitors; Markel Law for a legal assessment. The legal assessment was favourable and cover was provided for Markel Law to act on the insured’s behalf.
The member received legal advice which confirmed that the notice issued by the landlord was not valid as it was served on the terms set out in the incomplete lease and therefore could not be relied upon. The member therefore have reasonable grounds to argue that the terms relied upon were invalid. However they were also advised that if they failed to pay the rent owed that the landlord may try to instigate forfeiture proceedings.
The member was of the belief that the landlord was trying to remove their business from the property as they had messaged the landlord on numerous occasion to enter into a formal agreement, but had no response until the Notice was served. Shortly after Markel Law were instructed the landlord exercised their right under forfeiture on the alleged disrepair on the property and changed the locks to the property.
Markel Law were able to enter into correspondence with the landlord on the members behalf and negotiate a settlement agreement whereby the member agreed to vacate the property in 4 weeks (the member confirmed that they were looking to retire) but that the member would not be held liable for any disrepair or rent arrears. Markel Law incorporated the agreement into a formal deed of surrender which was legally binding. The member was also provided with practical advice upon vacating the premises including to take pictures of the property upon leaving to evidence the condition it was left in to assist in any future dispute should the landlord raise issue at a later date.
Markel Law’s fees of £8,880 were met by the policy.
Case study 2: Blocking access to business premises
The members’ business consists of dealing in scrap metal, skip hire and recycling. Vehicles coming and going from the members business premises used a particular area as a turning circle in order to drive into and out of the insureds business and to manoeuvre. The member’s neighbour erected a fence preventing the use of the turning area which significantly restricted the member’s ability to access their business premises.
After verifying the member membership, requesting and reviewing the documentation and supporting evidence the claims team referred the matter to our panel solicitors; Markel Law for a legal assessment. Following a positive legal assessment the claim was accepted and funding was granted for Markel Law to negotiate and correspond with the other party on the members behalf. Markel Law engaged in correspondence with the other side and attempted to resolve the matter without the need for legal proceedings. However after several failed attempts, legal proceedings were issued on the members behalf. Given the complexities of the case Counsel’s assistance was required. After 7 drafts of a settlement agreement it was finally possible to resolve the matter without the need for a hearing.
The total legal costs were just shy of £13,000 - these costs were met by the policy.
Case study 3: Trespass
The member owns a commercial business premises which it leases out to a tenant. The owner/occupier of the neighbouring unit brought to the members attention that the adjoining property at the rear of the members unit had encroached into the members land and have proceeded to panel and fence this off with concrete posts as well as placing down Astro turf and a shed. This in essence prevents the member from accessing their own land. The member sought advice from the FSB Legal Helpline and following their advice, the member sent a letter to the other party inviting them to reinstate the boundary position and giving them a three-month deadline in which to do so.
The other party refused to sign for the recorded delivery of the letter and called the police when the member delivered a second notice. The member had no response from the other party and so instigated a claim under the Legal Expenses policy.
After verifying the membership, requesting and reviewing the documentation and supporting evidence the claims team referred the matter to our panel solicitors; Markel Law for a legal assessment. The legal assessment was positive (merits were assessed at 51%-54% but the member was cautioned that there is always a risk that once a Letter of Claim is sent the other party may engage and allege that the land that they have claimed belongs to them. The claim was accepted and funding was granted for Markel Law to negotiate and correspond with the other party of the members behalf.
The other party has engaged with Markel Law and whilst they denied encroachment and trespassing, negotiations have resulted in a draft settlement agreement which once finalised will resolve the matter to both parties satisfaction.
Legal costs incurred were in the region of £5,000 - these costs were met by the policy.