OFFICE SERVICE CHARGE DISPUTE

Problem

• Tenco is the tenant of an office building in Central London paying a high rent for its prestigious headquarters.
  
  
• Lanco is a pension fund owning the freehold of the building which is one of the most valuable buildings in its property portfolio
  
  
• Tenco complains that its air conditioning has not worked for two years. It has 6 passenger lifts which constantly break down and is being over charged for other services.
  
  
• Tenco refuses to pay its service charge demands.
  
  
• Lanco denies all liability and says the building is properly managed by professional agents and top quality service companies.
  
  
• Tenco wants a rebate on its rent (it says it is paying for a Rolls-Royce in rent and getting an old banger). It claims the service charge is too high. It also wants the building to work properly as it plans to be there for another 10 years.
  
  
• The dispute continues for many years and the legal fees amount to several hundred thousand pounds.

Mediation

• The dispute is finally settled by mediation over two days and the parties agree:
  
  
• Lanco will pay Tenco some money immediately.
  
  
• Lanco will agree to carry out some work to improve the working of the lifts and air-conditioning at its own cost.
  
  
• Tenco agrees to pay service charges at a set level for the next 3 years.

Benefit

• Lanco  settles its dispute with its tenant and reaches agreement about the service charge for the future which safeguards its investment value.
  
  
• Tenco gets some money back is satisfied that the building will work properly in the future and knows what its future level of service charge will be.

 

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BOUNDARY DISPUTE

Problem

• Propco owns a large house with a garden in a prestigious area in the home counties. It obtains planning permission for a large detached house in half of the garden.
  
  
• Propco contracts to sell the house to Resident A and the building plot to Builder B.
  
  
• After contracts are exchanged the boundary markers between the house and the building plot are moved. Resident A and Builder B say that they both expected the disputed land to be included in their sales.
  
  
• Both parties refuse to complete their contracts and Resident A has to move into rented accomodation.
  
  
• The legal dispute lasts 18 months and a trial is due to take 3 weeks in the county court.

Mediation

• Mediation takes 1 day and it is agreed:
  
  
• Propco will accept less money than it expected from both sales.
  
  
• Resident A is released from the contract to buy the house.
  
  
• Builder B buys the house and the building plot.

Benefits

• Propco gets its money immediately.
  
  
• Resident A is free to buy another house.
  
  
• Builder B can put the boundary where it wants and hopes to refurbish the existing house and make a small profit on it.