Commercial leases are part of business and real estate law. Although they have some similarities to residential leases, there are differences between the two types of lease. There are also certain issues that can occur with a commercial lease that are not common, and sometimes not possible, with a residential lease.
Real estate disputes are often resolved through civil litigation. In Wisconsin, civil cases are handled by the circuit courts of each county. This is the court analysis of damages related to the dispute and award of appropriate compensation. Because there is no criminal sentencing with this type of legal case, it can be resolved out of court through alternative dispute resolution (ADR).
A commercial lease dispute could be any type of legal dispute involving a commercially leased property. It could be about the terms of the lease itself or it could be regarding the use of the property. A few examples of commercial lease disputes include:
Not every commercial lease dispute is resolved in the courtroom. Many are resolved through either mediation or arbitration. ADR is generally a more straightforward, less expensive process for all parties. In fact, many commercial leases include language stating that if a dispute does arise, a form of ADR must be used to reach a resolution. Unlike litigation, the results of ADR are kept confidential from the public.
Mediation is a conflict resolution process headed by a mediator, a neutral third party who facilitates a discussion and eventual resolution between the two disputing parties. The mediator listens to both parties’ sides and works with them to reach a flexible, mutually satisfying compromise.
With arbitration, a third party known as an arbitrator hears the case and reaches a decision for its outcome. The arbitrator can be one individual or a panel. Like with litigation, both parties present their evidence and testimonies to the arbitrator. Unlike litigation, there is no jury – just the arbitrator’s ruling, which may or may not be legally binding, depending on the terms of the lease’s arbitration clause.
The purpose of using litigation or ADR to resolve a commercial lease dispute is to determine an appropriate remedy for the damages suffered. An appropriate remedy depends on the nature of the damages. For example, if a breach of contract caused the tenant to lose money, the remedy might compensate the tenant for their financial losses.
Sometimes, liability for the damages must be determined in order to resolve a case and determine a fair remedy. A case like this might be one where a victim suffers an injury while on the property and there is a dispute over whether the tenant or the property owner is liable for the victim’s damages. Generally, property owners are liable for damages related to any injuries that occur on their properties, but only when injuries occur because of their negligence. If the tenant was the negligent party, the property owner could argue that the tenant should be the one liable for the victim’s damages. For example, if the tenant operated a retail store in a commercial property and failed to clear debris from the aisles, it was the tenant that did not take reasonable care to remove hazards that could injure visitors.
If you are involved in a dispute about your commercial lease, work with an experienced Appleton business lawyer. Contact our team at Hammett, Bellin & Oswald, LLC today to set up your initial consultation in our office, during which we can discuss your case in greater detail and determine the most productive way to proceed with its resolution.