Fives ways commercial landlords can unlock income in 2016

While looking to the long-term and managing costs are important for commercial landlords and asset managers, they could be doing much more to maximise income in the short term, according to commercial property dispute specialists at Lancashire law firm WHN Solicitors.

Here are the top five tips for 2016.

1. Breaches and review lease terms Gain a tactical advantage from breaches of a lease and open negotiations with a view to removing a tenant break option, extending the contractual term or increasing the level of rent in order to provide a better rental value of the asset.

Breaches of a user provision or an unlawful occupier of the premises are examples of opportunities that may enable a landlord to threaten damages, forfeiture or injunctive relief. Likewise, dilapidations during the term of a lease can create an opening for landlords to suggest a review of the lease terms.

2. Terminal dilapidations Terminal dilapidations are a good opportunity to bring in some significant income. Landlords need to have the right team of surveyors and solicitors in place to negotiate and recover the highest sum possible in lieu of repairs being carried out. This means having a firm grip on what is actually meant by diminution in value and understanding how to disprove arguments of supersession.

3. Break clauses If a tenant is looking to exercise a break option, make sure that the notice has been served correctly and any break conditions have been satisfied. Break clauses have historically been interpreted very strictly in favour of landlords and with the right legal assistance you may be able to tie your tenant in until the end of the contractual term or negotiate a favourable surrender premium.

4. Recover debt Effective credit control and debt recovery systems are essential for keeping on top of what is invariably the main source of income generated by commercial property. Waste no time in exploring the remedies available if a tenant starts to fall into arrears.

5. Recover spend Spending money on improving the infrastructure and aesthetic appearance of the property may not be high up on your agenda but there are often methods of carrying out works and recovering the cost from tenants either via service charge provisions or via a party structures clause. By Daniel Long, partner and head of the commercial property dispute resolution department, Woodcocks, Haworth and Nuttall Solicitors.