There are significant costs involved with managing and maintaining a multi-occupational development and these are usually the responsibility of the landlord and payable by the tenant under a lease. These costs are often referred to as ‘service charges’.
The lease will usually stipulate, amongst many things, the proportion of the service charge payable by the tenants, whether the service charge is variable or fixed, whether the service charge is payable in advance of any costs being incurred by the landlord and the way in which the service charge is to be demanded. It will also explain whether the tenants’ liability to pay the service charge is conditional upon a certain act by the landlord.
Although this relationship is primarily governed by the lease, statute also provides various protections for tenants and obligations on a landlord to ensure that the service charge, or any other costs payable under the lease, are recoverable. Failure to adhere to the terms of the lease or these statutory protections can enable the tenant to withhold payment of such funds which can have an adverse effect on the landlord being in funds to maintain the development. Similarly, a tenant’s failure to comply could result in the landlord having the lease forfeit. It is therefore vital to ensure that both a landlord and a tenant observe their obligations under the lease.
Service charge disputes is a highly technical area of law and we are here to help when –
- Your tenant has failed to pay service charge, reserve fund and/or major works;
- Your tenant has failed to pay ground rent;
- You want to bring a claim for forfeiture;
- Your landlord has failed to follow the correct procedure for recovering costs associated with major works;
- You seek to obtain a determination as to the reasonableness and payability of service charge and/or administration charges; and
- You seek an order to prevent your landlord from using the service charge to pay for legal fees.