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Commercial property disputes rise in Scotland

The Royal Institute of Chartered Surveyors in Scotland has seen a 30% increase in the number of rent reviews taking place as part of its Dispute Resolution Service in the last year.

The rent review service is being used by offices, retail and shopping centres, licensed premises and small retail units. Rent reviews can be carried out for any business from newsagents to large factories with annual rents from under £15,000 to over £1 million.

Small shops with an annual rent of under £15,000 have seen a 20% increase in disputes with tenants refusing to accept a hike in rent.

'Because of the recession some landlords are looking for higher rents from their tenants, however, for the same reasons those tenants simply cannot afford the increases,' explained Jasmine Sneddon, Head of RICS Scotland Dispute Resolution Service.

'In these cases, either party can use the Dispute Resolution Service and a decision on what a fair rent is will be made by a chartered surveyor in a bid to ensure a resolution is found,' she added.

RICS Scotland has been offering the Dispute Resolution Service for over 40 years and is the largest provider of the service for the property and construction sector in Scotland. The service has four main elements: rent reviews, adjudication, mediation and arbitration.

The aim is to sort the situation out as quickly as possible. Currently 92% of appointments for rent reviews are made within six weeks of receiving the application.

In the case of a rent review a chartered surveyor will investigate and make an impartial decision on the rent. Rents are based on the price per square foot, but other factors such as location, footfall and traffic are taken into consideration.

Adjudication is primarily for those who have entered into construction contracts. The chartered surveyor will look at issues within the contract but work can still go ahead throughout the dispute process.

Mediation is mostly used for construction or neighbour/land disputes. A chartered surveyor will facilitate a meeting between both parties and encourage them to reach a joint amicable decision.

Arbitration is largely used for construction projects, building surveying projects or issues around project costs. A chartered surveyor will act as a judge, hear from both parties, look at written evidence and will then make a decision which is legally binding.