Just St James restaurant in central London is in a dispute with its landlord over a massive increase to its rent and service charge payments.
The restaurant said its landlord, Legal & General, is demanding an annual increase of £75,000 in rental payments plus a new service charge of £50,000, up from an average of £3,000.
Proprietor Peter Gladwin told Caterersearch the £125,000 of new overheads in a year "is a slap in the face" for the restaurant team.
"The landlord has rejected our request to cut back or delay these increases and does not appear to have the slightest concern about whether our business survives or goes under," he said.
"It imagines there is another restaurant tenant around the corner waiting for this site but whoever operates this expensive building still needs to make a profit."
A spokesman for Legal & General said: "The rent review was discussed with the tenant, then determined and ratified by an independent expert through assessing prevailing market rents in the locality and acting on representations made by both the landlord and the tenant, in accordance with standard market principles.
"This expert determined an appropriate market rental level at the rent review date, which took into account the unit's quality, location and size."
Stephen Owens, head of rent reviews at property agent Christie & Co, confirmed that an increasing number of rental disputes are being referred to arbitration, as many tenants - hit by the recession -are fighting any sort of increase.
He advised tenants and landlords to keep lines of communication open to ensure disputes do not arise.
Owens revealed that a number of hospitality operators are now paying rent on a monthly rather than quarterly basis to ease cashflow issues, after striking agreements with their landlords.
By Kerstin Kuhn
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