The Changning District People’s Court has seen an increase in commercial lease disputes over the past three years, coinciding with a downturn in the traditional retail sector, the court said.

According to a series of white papers issued by the court on Tuesday, between 2016 and 2018, the court accepted 902 commercial property lease disputes: 256 in 2016, 265 in 2017 and 381 in 2018.

According to the court, changes in shopping and consumption habits are partially behind the increase.

The growing popularity of online shopping is putting pressure on brick-and-mortar business, which in turn are facing rising rents. When financial pressures become too much, many operators stop paying rent and in some cases even disappear altogether.

Recent changes in zoning policies have also forced many traditional businesses to close. This has also lead to a rising number of lease disputes, as has the dismantlement of illegal commercial structure by authorities. In both cases, lose of business income has prompted many business owners to terminate their rental agreements unilaterally.

Complicating arbitration of such cases is the fact that many important decisions between renters and owners are made via informal channels, including phone calls and WeChat.

In its white paper, the court calls for improvements in contract terms as well as the use of formalized agreements using notaries, intermediary agencies and legal advisers.

Related district authorities should intervene in lease disputes in early stages and enhance cooperation to prevent illegal leasing, the court recommends.

By the end of last year, there were some 15,660 private businesses in Changning and the number is still growing.