Apportioning service charge—the standard conditions

In sales of investment properties where there are often many occupational tenancies with rental, service charge and insurance rent payments, sinking funds and rent reviews ongoing, the general regimes set out by both the Standard Commercial Property Conditions (Second Edition) and the Standard Conditions of Sale (Fifth Edition) (together the 'standard conditions') are often amended to deal more specifically with apportionments of these charges and transfer of sinking funds. The standard conditions provide as follows:

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   Standard Commercial Property Conditions (2nd edn) (SCPC)

   1. ◦

      SCPC 8.3.2 requires the apportionment date to be the date of actual completion (for sales with vacant possession and/or where the seller has opted to take both rental income and interest for any period of delay in completion). Otherwise the apportionment is made on the contractual completion date, regardless of whether completion takes place later

   2. ◦

      SCPS 8.3.3 awards the day of apportionment to the buyer

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      SCPC 8.3.4 apportions annual sums on a calendar year basis even if they are paid by more frequent (eg quarterly) instalments

   4. ◦

      SCPC 8.3.5 sets out a mechanism for provisional apportionment of sums that are not yet known, and subsequent adjustment/refund/further payment when the final sum is ascertained This is likely to apply to outgoings such as service charge

   5. ◦

      SCPC 8.3.6 provides for the buyer to