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Long commercial leases and the risks of squatters

Real estate laws related to adverse possession have been in the news quite a bit in recent months. There have been several high-profile cases of residential property owners being unable to gain possession of a property they purchased due to squatters.

Squatters, or people occupying a property without a lease or other justification for doing so, can cause a host of issues for property owners and even tenants with leases. The laws on squatting and adverse possession are different from one jurisdiction to another. Therefore, it is important not to overly generalize the applicability of a case unfolding in a foreign jurisdiction. With that said, a high-profile scenario involving one of the world’s most famous restaurateurs highlights the importance of limiting commercial leases and properly securing commercial properties, even if a tenant doesn’t currently occupy the space.

A case out of London is a landlord’s nightmare

Gordon Ramsay is one of the most famous and successful culinary professionals in the world. People are familiar with not just the restaurants he has run but also numerous television shows where he has helped those in the hospitality industry improve their operations.

Even someone who draws the attention of the world’s culinary community and the entertainment sector cannot automatically protect a rental property from the misconduct of others. A currently unused space in London has been garnering international attention. A representative for Chef Ramsay signed a lease at the property years ago.

The terms of the lease were relatively unusual, to say the least. They included a 25-year term for the lease with an annual rent payment of £640,000. There were allegations that the lease was the result of embezzlement and fraud on the part of a business manager, and there has been legal action related to the property within the last decade.

There is no restaurant currently operating there, which provided an opportunity for squatters who call themselves “the Occupiers.” A group of people has assumed possession of the property and posted warnings that others cannot legally access the space. There could very well be a lengthy legal battle required before the chef or the party who owns the leased building regain possession and evict the squatters from the space.

In the meantime, the possibility exists for those non-tenants to cause substantial damage to the rental unit. The circumstances of this case highlight the importance of reaching lease arrangements that are reasonable and appropriate. They also highlight how important the regular maintenance of rental spaces can be for both landlords and tenants.

Commercial lease disputes may attract the attention of unsavory individuals who intend to take advantage of a conflict between others. Those struggling with a commercial lease or who are otherwise eager to renegotiate terms may need assistance when approaching a landlord or documenting their current circumstances. Learning from the mistakes that others make during a lengthy commercial tenancy may benefit those who have invested in a business or commercial real property.