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Service Charge and Recovery Advice
In order to gain the maximum return on investment from a commercial property portfolio, a landlord ideally wants to have a clear lease, with all the provision of service charges (such as security), repairs and maintenance being met by the tenant.
The best way to achieve this in a multi-tenanted building is for the landlord to control the services required and issue a service charge to the tenants to recover the cost.
What can a Commercial Landlord Recover Under a Service Charge?
As a general rule, a landlord cannot recover the cost of items which are not clearly included in the lease and are of no benefit to the tenants, and all service charges must be fair and reasonable.
Beware the ‘sweeper clause’. When it comes to advising on service charges, our decades of experience in leasehold management is invaluable. For example, ‘sweeper clauses’ (eg a 10 percent management fee) relating to service charges are narrowly construed by the Courts and this may result in your tenant not having to pay the service charge at all.
At Judge & Priestley, we draft clear, concise, water-tight service charge terms to ensure that you will not be out of pocket at any time during the tenancy.
The Landlord and Tenant Act 1985
The Landlord and Tenant Act 1985 sets out the ground rules for service charges, including the requirement that they are reasonable and the need for prior consultation with the tenant/s.
Under Section 20 of the Act, if a landlord proposes to carry out works of repair, maintenance or improvement costing an individual service charge payer more than £250, all those required to pay the charge must be consulted prior to the work taking place.
Service Charge Arrears
If you find yourself in a situation where your service charges are in arrears, we can offer our services, not only as property law specialists, but as debt recovery specialists as well.
Our specialist debt recovery division has an enviable reputation throughout the UK of collecting income for landlords quickly and efficiently, and we seldom need to take County Court action to obtain payment.
To find out more about service charges and/or collection of service charges, fill in our contact form, and we will call you back to discuss your needs. Alternatively, call us on 0208 290 0333 to make an appointment.