The following Property guidance note provides comprehensive and up to date legal information covering:
It is usual for a lease not to refer to a specific percentage of service charge costs, but instead provide for the tenant to pay a ‘fair and reasonable’ proportion of the costs or some similar discretionary wording, often based on floor area. When considering this, tenants should concentrate on the following matters:
landlords should confirm the actual percentage of costs attributed to the premises currently and confirm how it is calculated in practice (floor areas could be gross or net for example). Tenants should press for this information early on in the transaction as it might not be readily available
are there costs which should not be attributed to the premises (in other words is there anything which makes a calculation based on floor area inappropriate)? For example, it may not be fair for a ground floor tenant to pay for a lift, and should a tenant pay for car park maintenance if the lease does not permit it to park?
ensuring the proportion is fair, reasonable and properly determined. The Model Commercial Lease (MCL) has a useful clause which goes further than usually seen as it sets out fully the basis of the landlord’s calculation, but should be acceptable to a landlord
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234