We asked our team for their predictions of what they think 2025 might bring in the Property Disputes sector.
Insolvencies and Restructuring
As widely trailed in the press, insolvencies are expected to rise in the retail and hospitality sector in the coming year, as businesses already under pressure from increasing costs face weak consumer spending. This is expected to peak from April 2025 as the measures set out in the Autumn budget begin to bite. For those companies able to afford the upfront costs, restructuring plans will remain an attractive and flexible restructuring tool. As "out of the money" creditors, landlords will need to continue to adapt and refine their strategies and priorities in response to insolvency risk.
Landlord and Tenant Act 1954
2025 could see the start of a seismic shift in the law relating to a tenant's security of tenure. Or maybe not! The consultation period for the Law Commission's November 2024 Consultation Paper which considered 4 possible future models of security of tenure will end on 19 February 2025. The Law Commission's response to the feedback received during the consultation period is going to make very interesting reading when published. In the meantime, we should expect litigated 1954 Act lease renewals to continue to focus on (a) the level of the new market rent to be paid by the tenant (and whether there should be a rent-free period) and (b) the application of the O'May principle to proposed tenant break options and new green lease provisions in particular.
Commercial Service Charges
Rising costs and increasing statutory obligations for both landlords and tenants are likely to lead to increased scrutiny of service charge regimes (and relevant lease provisions) on both sides. The retail sector in particular is likely to see a rise in disputes as landlords look to manage and reallocate costs and market expectations shift for tenants. For buildings affected by the Building Safety Act 2022, we will see further challenges around the recovery of costs within, and compliance with, the framework of the Act.
Building Safety Act 2022
There will be a continued focus on the Building Safety Act 2022 in 2025 which will bring fresh challenges for those involved with buildings affected by the Act. From a property litigation perspective, we are expecting to see an increase in disputes between landlord and tenants as the property sector navigates this relatively new and complex piece of legislation. We will be awaiting with interest the outcome of the appeal in Triathlon Homes LLP v Stratford Village Development Partnership and Others which will provide some much needed clarity on remediation contribution orders. Additionally, as we are seeing an increase in the use of improvement notices by local authorities, it will be interesting to hear the Tribunal's thoughts on the interplay between remediation orders and improvement notices.
Public Spaces
The new year will herald the implementation of the much publicised Martyn's Law which will transform security requirements for publicly accessible spaces. After a year of high profile direct action campaigns by activist groups - and a summer of litigation concerning protest camps within universities – we also anticipate a further rise in the use of newcomer injunctions (endorsed by the Supreme Court in late 2023) to manage and mitigate the risk of disruptive action.
Flooding and riparian rights
We have had a very wet and windy last year or so, and pictures of floods have become a common feature of news reports. For every flood there is likely to be some part of the wider drainage system which has been overwhelmed or failed. Riparian rights are one of those arcane areas of the law which everyone nods sagely about, but rarely truly get to grips with. Riparian rights relate to the common law of watercourses, whether natural or manmade. Along with rights to extract water from a watercourse running through your land, ( the cases all seem to relate to brewing!), there come responsibilities to maintain designated flood defences on your property and to maintain the bed and banks and any trees and vegetation on the banks and not do anything which would increase the risk of flooding on neighbour's land. Victims of flooding and their insurers will naturally look to fix liability on others, and by failing to maintain flood defences, or encouraging water to flow faster and so causing flooding downstream, or by failing to clear watercourses and so causing flooding upstream a riparian landowner may find themselves legally underwater.
