Unopposed Business Lease Renewals Pilot Scheme & The Role Of The Expert
The First Tier Tribunal’s pilot scheme for unopposed business lease renewals came into force on 1st January 2018 and is expected to last for one year. From this date, unopposed lease renewals issued in the County Court at Central London (the “CCCL”) will be transferred to the First Tier Tribunal (Property Chamber) (the “FTT”).
The stated aim of the pilot scheme is to “ensure that all cases proceed to a final determination as smoothly and as quickly as possible” and to save the parties costs.
The significant changes from the current process are summarised as follows:
• The timeframe from the date of issue of proceedings to the final hearing is expected to take place in just 20 weeks.
• The parties will be entitled to agree a 3-month stay at the outset of the proceedings for Professional Arbitration on Court Terms (PACT) referral or mediation. Save for in exceptional circumstances, no further deferral or stay will be granted.
• If an initial 3 month stay is not agreed, the FTT will issue its standard directions, which will then apply. There will no longer be an initial Case Management Conference or an opportunity for the parties to negotiate directions beforehand.
• The directions permit one round of tenant’s amendments to the travelling draft lease. There is no provision for the preparation or exchange of a schedule of disputed terms, disclosure and witness statements.
• The parties’ valuers are required to provide their evidence at a much earlier stage before lease terms are agreed and at the hearing, the Judge will sit with a valuer/assessor.
Clearly, therefore, the aim of the pilot scheme is to speed up the lease renewal process and progress to the disposal of the claim (either by consent or by final determination) much sooner than is currently the case. To help achieve this, the parties’ experts are now required to be much more proactive from an earlier stage in the proceedings.
Cases which only concern rent may be dealt with by way of written submissions rather than an oral hearing. The parties cannot therefore rely on tactical advantages that were caused by the delays in listing matters. With a quicker turn around proposed by the new scheme, the costs of issuing a claim and progressing to a hearing may not be as costly as it currently is. However, it is possible that more claims will progress to the hearing stage, which is typically the most expensive part of the proceedings, and it may result in more costs than initially anticipated. With parties no longer able to produce witness statements of fact, there is a question mark over how evidence will be given in the event that the length of the term of the renewal lease for example is in dispute.
The pilot scheme does not alter the experts’ overriding duty to help the court with matters within their expertise. As such the role of expert to be more organised and proactive, and to move quickly and decisively at an early stage, takes on a greater significance than ever before.
If you have any questions or would like more information, please contact a member of our Valuation & Advisory Services Team.