Service charge and outgoings

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.

Service charges in commercial property—RICS professional statement

Commercial service charges are not (yet at least) subject to statutory control. However, the first edition of the Royal Institution of Chartered Surveyors (RICS) professional statement, ‘Service charges in commercial property’ (the Service Charge Statement), is effective for all service charge periods commencing on and from 1 April 2019. It supersedes the

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Property News

Market value, distributions and notional transactions—key SDLT lessons from Tower One St George Wharf Ltd v HMRC

Tax analysis: In Tower One St George Wharf Ltd v HMRC, the Court of Appeal considered the basis on which stamp duty land tax (SDLT) should be assessed and whether that resulted in SDLT being paid on the market value, the actual consideration paid, or on some other basis for a complex transaction within a corporate group. The taxpayer argued that the ‘Case 3’ exception under section 54(4) of the Finance Act 2003 (FA 2003) applied, which would result in SDLT being charged on the actual consideration. HMRC argued that the exception did not apply, which would result in SDLT being paid on the market value of the property. Alternatively, HMRC argued that if the exception did apply then the anti-avoidance provisions at section 75A FA 2003 applied, potentially resulting in an even higher SDLT charge. The Court of Appeal held that although the Case 3 exception applied, the anti-avoidance provision in FA 2003, s 75A also applied. This resulted in SDLT being assessed on an aggregate amount that was even higher than the property's market value (although HMRC did not seek to increase its assessment beyond market value). Therefore, the appeal was dismissed. As explained by Jon Stevens, partner, and Rory Clarke, solicitor, at DWF Law LLP, this decision deals with the interaction of a number of complex SDLT provisions and clarifies the SDLT provisions relating to transfers to connected companies and the SDLT anti-avoidance provisions, with implications for corporate structuring and tax planning.

Welsh Government publishes outcome of permitted development rights consultation

The Welsh Government has published the outcome and summary of responses to its consultation on proposed changes to permitted development rights in Wales, covering air source heat pumps, electric vehicle charging units, temporary campsites, statutory undertakers’ electricity development, emergency affordable housing, meanwhile uses, the definition of major development and the introduction of permitted development rights for reverse vending machines, setting out stakeholder views to inform future planning policy decisions across Wales. The consultation ran from 8 April 2025 to 1 July 2025.

MHCLG launches consultation on freehold estate homeowner protections

The Ministry of Housing, Communities and Local Government (MHCLG) has launched a consultation on proposals to reduce the prevalence of privately managed housing estates in England, where amenities such as roads, green spaces and drainage systems are not adopted by public authorities. The consultation sets out measures to increase the adoption of estate amenities on new developments, introduce common standards for adoptable infrastructure, consider mandatory adoption for certain public assets, remove financial incentives that encourage developers to avoid adoption, and improve transparency and data on estate management arrangements. It also seeks evidence on the impacts of these proposals on homeowners, developers, local authorities and management companies. The consultation closes on 12 March 2026.

UK Parliament announces introduction of Leases (Integrated Retirement Communities) Bill

The UK Parliament has announced the introduction of the Leases (Integrated Retirement Communities) Bill in the House of Commons, aiming to create a statutory framework for occupancy leases, fees and operator regulation in integrated retirement communities. The Bill seeks to clarify lease terms, ensure fee transparency and strengthen oversight of operators to protect residents. It had its first reading on 17 December 2025 and is scheduled for second reading on 16 January 2026.