Both residential and commercial landlords aim for a 'clear lease': where the costs of repair, maintenance and provision of services are met by the tenants rather than being deducted from the rent received.
Where a building is in multi-occupation it is sensible for repair, maintenance and services to be controlled by the landlord, with the costs being recovered from tenants through the service charge.
In commercial leases the tenant's obligation to pay service charge, and the landlord's ability to recover costs, are entirely contractual and are not subject to statutory control. In residential leases the tenant's obligation to pay depends on there being a contractual service charge clause, but the landlord's ability to appoint managing agents, carry out works and to recover costs is heavily regulated by statute.
Commercial service charges are not (currently) subject to statutory control. However, the Royal Institution of Chartered Surveyors (RICS) Professional Standard on Service charges in commercial property, 2nd edition (the Service Charge Standard) is effective from 31 December 2025. It supercedes the Service charges in commercial property, 1st edition, which was originally issued...
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