Commercial property service charges
Discussion
The managing agents for my office complex are seeking to collect £2000 for 2017 (I have only just received the bill) and £2000 for 2018 for possible gates to the complex. My share is 9%. However, when asked they confirmed this is just a consideration at this stage and further discussions with owners/tenants would need to take place.
Can they do this if there is no firm commitment to the expenditure?
Can they do this if there is no firm commitment to the expenditure?
What does your lease say? Unlike residential service charges, there’s no tight statutory regulation of commercial service charge so it comes down entirely to the lease wording.
Generally a landlord can put something in the budget, obtain funds in advance but then perhaps not go ahead yet. However, they can’t usually carry out improvements, just repair and maintenance (which may mean replacement if something is beyond repair). Adding gates where there were none might constitute improvement.
Generally a landlord can put something in the budget, obtain funds in advance but then perhaps not go ahead yet. However, they can’t usually carry out improvements, just repair and maintenance (which may mean replacement if something is beyond repair). Adding gates where there were none might constitute improvement.
The lease just says:
To pay and indemnify the Lanlords against:
all rates, taxes, assessments, duties, charges, impositions and outgoings of any sort which are now or during the Term shall be charged assessed or imposed on the premises or upon the owner
As the Landlord isn't the one actually paying the service charges he doesn't care what the managing agents are charging for.
The question is whether or not it is reasonable for the managing agent to charge for a speculative cost/improvement rather than a defined cost/improvement?
To pay and indemnify the Lanlords against:
all rates, taxes, assessments, duties, charges, impositions and outgoings of any sort which are now or during the Term shall be charged assessed or imposed on the premises or upon the owner
As the Landlord isn't the one actually paying the service charges he doesn't care what the managing agents are charging for.
The question is whether or not it is reasonable for the managing agent to charge for a speculative cost/improvement rather than a defined cost/improvement?
PurpleMoonlight said:
The lease just says:
To pay and indemnify the Lanlords against:
all rates, taxes, assessments, duties, charges, impositions and outgoings of any sort which are now or during the Term shall be charged assessed or imposed on the premises or upon the owner
As the Landlord isn't the one actually paying the service charges he doesn't care what the managing agents are charging for.
The question is whether or not it is reasonable for the managing agent to charge for a speculative cost/improvement rather than a defined cost/improvement?
That clause is usually there in addition to the service charge provisions - the clause you quote doesn't actually relate to landlord's expenditure on common estate items at all. It's there to make sure you're liable for business rates etc.To pay and indemnify the Lanlords against:
all rates, taxes, assessments, duties, charges, impositions and outgoings of any sort which are now or during the Term shall be charged assessed or imposed on the premises or upon the owner
As the Landlord isn't the one actually paying the service charges he doesn't care what the managing agents are charging for.
The question is whether or not it is reasonable for the managing agent to charge for a speculative cost/improvement rather than a defined cost/improvement?
Jobbo said:
That clause is usually there in addition to the service charge provisions - the clause you quote doesn't actually relate to landlord's expenditure on common estate items at all. It's there to make sure you're liable for business rates etc.
That's all their is that could relate to services charges.I guess it is down to the lease, but it seems completely wrong that the tenants would be paying for this out of the service charge as it does not sound like maintaince.
If the tenants pay £20k to improve the property, what is to stop the landlord asking for an increased rent next year for his imoved property.
If the tenants pay £20k to improve the property, what is to stop the landlord asking for an increased rent next year for his imoved property.
ging84 said:
I guess it is down to the lease, but it seems completely wrong that the tenants would be paying for this out of the service charge as it does not sound like maintaince.
If the tenants pay £20k to improve the property, what is to stop the landlord asking for an increased rent next year for his imoved property.
I think it depends... mostly on the terms of the lease. (Notice a pattern from the surveyors here).If the tenants pay £20k to improve the property, what is to stop the landlord asking for an increased rent next year for his imoved property.
It would not be the first time a landlord has tried something on - but if there really is no service charge clause it would be an impressive attempt.
Sadly every lease is very different and without reading this one in detail no-one can really help the OP.
As I mentioned before, nobody can advise you without seeing everything. But if that's the case you are basically stuffed and can't object, since there's no mechanism for doing so in the clause you quoted.
The only grounds for non-payment would be that it's not properly imposed on the premises.
The only grounds for non-payment would be that it's not properly imposed on the premises.
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