The pandemic has had a significant impact on commercial businesses, with a legacy that will last long after lockdown ends. Without doubt, a dysfunctional and disrupted commercial property sector will have far-reaching implications for UK GDP and the future stability and growth of the economy.
The situation has created unexpected tensions between commercial landlords and tenants, with the UK government anxious to avoid ongoing conflict and strife, especially once the current moratorium ends. The government is therefore encouraging parties in dispute to use independent mediation by adopting a voluntary code of conduct with the following key messages.
Support for the code comes from across the property professions, including the organisations that formed the code's steering group; namely the British Chambers of Commerce, British Property Federation, British Retail Consortium, the Commercial Real-Estate Finance Council Europe, retail representative body REVO, RICS and UK Hospitality, together with active support from some 20 trade associations. This diverse group of participants is unanimous in the belief that help is required immediately.
Recommending that landlords and tenants act as economic partners rather than opponents, the code requires transparency and collaboration, with both parties acting reasonably and responsibly to help each other survive and prosper. It also advocates that, where a commercial property dispute results from the impact of the pandemic, the parties should use independent mediation to reach a satisfactory settlement.
To help landlords and tenants meet the code's objectives, RICS' Dispute Resolution Service has established the Commercial Rental Independent Evaluation Service (CRIES). CRIES enlists senior and highly experienced RICS professionals working in the commercial property sector to provide an impartial, informed and robust form of mediation as independent evaluators.
Where a landlord and tenant are challenged to map out their future, the evaluator is appointed to help both sides equally by drawing on their own business expertise, negotiating abilities, dispute resolution experience and common sense. Thus they bring more to the table than traditional mediators, who are often not expected to possess this level of insight and experience.
Landlords and tenants are encouraged to use this new service to resolve what are likely to be serious and complex confrontations – both now and for some time in the future – and by doing so, inject new life and balance into the marketplace.
Prof. Graham F. Chase FRICS is chairman of Chase & Partners and a visiting professor in the School of Applied Management at the University of Westminster
Related competencies include: Conflict avoidance, management and dispute resolution procedures, Landlord and tenant
Jen Lemen FRICS 29 May 2023
Ben Willis 26 May 2023
Christopher Somorjay 19 May 2023