Service Charges

Service charges are provided for in leases to allow the landlord to recover the costs incurred in maintaining and running the property portfolio. It is often a hidden cost which many tenants do not consider as part of their negotiations when taking on leases.

But it is important for both landlord and tenant, because as a tenant you don't want to have unexpected bills you have little control over, and you certainly don't want to be paying for things that you do not benefit from - why should you pay for maintenance of a lift when you are on the ground floor?  Equally if the landlord cannot claim a contribution to the service charge from tenants, then there may not be enough money to pay for repairs to the building, which means the occupants suffer.

Getting it right at the outset means that the service charge is balanced, and there are no nasty surprises.

Commercial Property Service Charges

These are governed almost wholly by what the lease says, regardless of how "fair" or not it may be.  So if you are a tenant and you don't want to wite a blank cheque for your landlord, make sure you know what you are agreeing to.