Service Charge Disputes
A service charge is a mechanism contained in a lease of premises usually located in a centre such as a multi-let building or series of buildings, or a shopping centre or retail park that allows the landlord to recover its running costs from the tenants.
There is often a direct conflict between the interests of landlord and tenant in relation to the service charge provisions:
The landlord will regard the primary purpose of the service charge provisions as enabling it to achieve a “clear” rent. The landlord therefore wants all its expenses to be paid by the tenant.
The tenant will see the primary purpose of the service charge provisions as setting out the landlord’s duties in relation to the services. The tenant therefore wants to remove from the service charge provisions all those items that it thinks should be paid for by the landlord.
Service charges for residential property are subject to extensive legislation. At present, there is no statutory framework for controlling the level of service charges for commercial property. As such, the parties are free to negotiate whatever service charge provisions they wish and where a dispute arises this will be settled by reference to the terms of the lease (contract).
We will assist with the initial drafting of service charge provisions or can advise on existing provisions. We act for landlords and tenants. We also advise in the event a dispute arises although the lease itself will often contain mechanisms for arbitration or mediation.
If you have a query or would like to book an appointment please get in touch with our First Contact team on 01256 320555 or email firstname.lastname@example.org.
Litigation & Employment Director