Commercial service charges—disputes and procedures
Commercial service charges—disputes and procedures

The following Local Government guidance note provides comprehensive and up to date legal information covering:

  • Commercial service charges—disputes and procedures
  • Service charge recovery—commercial versus residential
  • The commercial property Service Charge Statement
  • What to do in the event of a dispute—right to challenge
  • What to do in the event of a dispute—alternative dispute resolution
  • What to do in the event of a dispute—court proceedings
  • Withholding payment of service charges
  • Adjustment of incorrect service charge following resolution of dispute
  • Complaints

This Practice Note explains the procedure for handling commercial service charge disputes including by reference to the mandatory obligations and best practice guidance under the Royal Institution of Chartered Surveyors (RICS) professional statement, ‘Service charges in commercial property’ (Service Charge Statement).

For guidance on what service a commercial landlord is required to provide and what expenses can then be recovered, see Practice Notes: Commercial—landlord's liability to provide the services and Commercial service charges—what expenses can the landlord recover?

Service charge recovery—commercial versus residential

Service charges serve the same purpose in commercial property as they do in residential property—that is, they allow a landlord to provide services to repair and maintain a property and recover the costs of so doing from a tenant.

However, whilst residential service charges are subject to extensive legislation (see Residential—statutory limitations on recovery of service charges and administration charges and related Practice Notes), the only legislation directly relating to commercial service charges is the six month time limit on claiming against a former tenant under the Landlord and Tenant (Covenants) Act 1995 (LT(C)A 1995), which applies to rent and service charges and any other liquidated sum due to failure by the tenant to comply with tenant covenants (see Practice Note: Former tenants, guarantors and overriding leases).

The commercial property Service Charge Statement

As mentioned above, commercial