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

Was the tenant’s intention to return to the property as an owner sufficient to satisfy the ‘tenant condition’ (Hackney London Borough Council v Weintraub)

Local Government analysis: This judgment is another in a string of decisions concerning the interpretation of the tenant condition. The issue in this case was narrower than in previous hearings. Hackney appealed the previous judgment of Mr Justice Zacaroli made in April 2024. Hackney appealed on the basis that an intention to return to the property as an owner cannot satisfy the ‘tenant condition’. The judge in this case disagreed with such an assertion and the appeal was dismissed. There were other elements to the appeal, but those fell by the wayside. The Judge held that the tenancy condition can be satisfied even where the tenant does not intend to return to the premises as a tenant. It was held that there is no suggestion within the legislative provision that a return as a tenant is required. The condition remains satisfied if a tenant intends to return in any capacity, as long as this can be measured and shown against objective ascertained fact. Written by Clive Adams, head of Housing Management at Birketts LLP.

HM Land Registry updates Practice Guides 1 and 8

HM Land Registry (HMLR) has updated two practice guides: Practice Guide 1—First registrations and Practice Guide 8—Execution of deeds.

Property weekly highlights—19 December 2024

This week's edition of Property weekly highlights includes: cases on repudiatory breach of a lease, the Tenant Fees Act 2019 and the right to manage, and a look at the proposed reform of the energy performance in buildings regime and proposed planning reforms.

Mayors to be given greater planning powers under ‘devolution revolution’

Planning analysis: An English Devolution White Paper (the Paper) proposes to give Mayors new development management powers, including the ability to call in planning applications of strategic importance and to charge developers a Mayoral Levy to ensure that new developments come with the necessary associated infrastructure. This analysis focuses on the proposals relating to Mayors’ planning powers under the Paper.