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Landlord and tenant: service charges

Posted by Lotty Reeves on 28th April 2015

Landlords with a large portfolio of properties often have an agreement with one contractor to provide services to several properties within the portfolio. A decision from the Upper Tribunal (Lands Chamber) emphasises the need to keep separate accounts for each property and to pay regard to the detail of the lease.

The tribunal held that a landlord was not entitled to apportion communal lighting charges by reference to the rateable value of the estate compared to the rateable value of other properties owned by the landlord and covered by a global maintenance contract. While the landlord may have obtained the benefit of economies of scale, and passed on that benefit, if any apportionment of costs does not comply with the service charge provisions and a tenant feels that the apportionment used is disadvantageous to it, unsurprisingly the tenant may contest the service charge.

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