Market Insight

ChatL&T: Landlord and Tenant Relationships in a Time of AI

The growth of artificial intelligence has been exponential in 2025, and global spending on AI is forecast to surpass $2 trillion in 2026, increasing at an annual rate of almost 28%. Adoption is equally remarkable.
January 13, 2026
AI in planning
The growth of artificial intelligence has been exponential in 2025, and global spending on AI is forecast to surpass $2 trillion in 2026, increasing at an annual rate of almost 28%. Adoption is equally remarkable.

When launched, ChatGPT reached 1 million users in just 5 days and 100 million users within two months, a pace far outstripping previous platforms.

By comparison, it took LinkedIn over seven years to reach 100 million users, Facebook four and a half, WhatsApp three and a half, and even TikTok nine months. Against this backdrop of unprecedented growth, AI tools now offer instant, detailed answers to countless questions.

But when these answers intersect with the legislation, regulation and over 100 years of case law that underpin the commercial property system in England and Wales, the risks quickly become evident.

David Thomas, Occupier Advisory partner in our Reading office, spoke to Ethical Reading, to explain.

AI in the real world: accuracy is not guaranteed

Several recent cases demonstrate the potential dangers of relying on AI-generated legal or quasi-legal information:

  • A litigant in person had her UK tax tribunal case dismissed after unknowingly submitting nine fabricated historic tribunal decisions created by ChatGPT.
  • The High Court has issued warnings to solicitors after fake legal citations were found in submissions generated using AI.
  • Another solicitor blamed Google for incorrect cases referenced in an appeal, having failed to check their accuracy before filing, and risking professional sanction.

These examples highlight a simple truth: a tool is only fit for purpose if the user understands how to use it. And in the context of commercial property, that understanding must be deep.

As the old saying goes, if all you have is a hammer, everything looks like a nail. AI models rely on patterns from the information they are trained on, meaning their outputs can be skewed, incomplete, out of context or simply wrong.

Should you use AI to negotiate your lease?

In short: No, or at least, not yet.

Relying on tools such as ChatGPT, OpenAI’s models, Llama or Copilot to negotiate heads of terms or undertake lease renewals carries a high level of risk, with potentially catastrophic financial or reputational consequences. Here’s why.

 

AI does not have access to reliable market data

Commercial lease negotiations often hinge on:

  • rent levels
  • rent-free periods and incentives
  • comparable transactions
  • net effective vs headline rents

There is no open source database capturing these in a comprehensive way. Although leases over seven years are registered at the Land Registry, key commercial details remain confidential or behind paywalls. AI therefore cannot provide an accurate sense of market reality.

AI cannot understand context, yet context is everything

Commercial leases evolve over time. AI tools cannot reliably interpret:

  • Deeds of Variation
  • Memoranda
  • Licences to Assign or Alter
  • Whether the tenancy is “protected” under the 1954 Act
  • Market conditions and local demand
  • The building’s physical condition
  • Occupier mix or operational constraints

Without these inputs, any advice AI provides risks being misleading or irrelevant.

AI cannot assess building condition or repair obligations

Key negotiation points often depend on the actual physical state of the premises:

  • Is the warehouse roof suffering from corrosion?
  • What is the life expectancy of the M&E systems?
  • How is the service charge sinking fund being managed?

A machine cannot inspect a building, and cannot substitute for professional surveying judgement, yet these issues materially influence negotiation strategy and cost exposure.

AI poses confidentiality risks

In a world where agreements routinely include NDAs and confidentiality clauses, inputting details of your transaction into an AI system could result in residual learning or unintended data exposure. This may itself breach contractual obligations.

Misapplied or fabricated case law is a real risk

AI models sometimes “hallucinate” producing entirely invented case references or applying real ones incorrectly. This is especially dangerous in areas governed by specific case law, such as lease renewals under the Landlord and Tenant Act 1954.

Unless the user has perfect knowledge, AI may:

  • misinterpret legal principles
  • recommend actions based on false information
  • provide “authorities” that do not exist

The consequences could be severe.

Commercial property: A practical, human-led discipline

Commercial property is a tangible asset subject to weather, wear and tear, market cycles, and human negotiation behaviours. The leasehold system which is rooted in feudal origins and only modernised over the past century, remains complex, nuanced and context dependent.

This is not an environment where automated advice can safely replace professional expertise.

When negotiating terms, renewing a lease, or making strategic property decisions, we strongly recommend engaging with qualified surveying and legal professionals who can:

  • Assess building condition
  • Review the current legal position
  • Provide accurate market insight
  • Interpret case law correctly
  • Ensure due diligence and risk mitigation

These elements cannot yet be replicated reliably by AI.

For further guidance on best practice, refer to the RICS Code of Leasing Business Premises, or speak to the Vail Williams Lease Advisory or Building Consultancy teams for tailored support.