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Comparison of Residential and Commercial Lease Service Charges

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There are substantial differences between residential and commercial leases.

Residential service charges are the subject of substantially more legislation and rules than those of commercial leases. Although there are the RICS Guidelines in respect of service charges for commercial leases they are essentially a matter of contract. This means that it is particularly important to review the lease in detail when considering the obligations for commercial property leases.

Before considering the differences between commercial and residential property service charges it is sensible to clarify exactly what a service charge is.

It is essentially a payment made by the tenant to the landlord, in addition to rent, for costs incurred in providing services in relation to the property.

A lease will usually specify services the landlord is required to provide. In addition any services which the landlord may provide but has no duty to do so. If the landlord chooses to provide the services the tenant must reimburse the landlord through the service charge.

David Richards, Senior Associate in Brethertons Defended Litigation Team has written a white paper which sets an overview of what is necessary to comply with the relevant legislation and contractual obligations for both residential and commercial leases.

The contents of the white paper, covers:

  • Comparison of Residential and Commercial Lease Service Charges
  • Residential Leases – Service Charges
  • What Is A Service Charge?
  • Residential Service Charges
  • Statutory Protection
  • Reasonableness
  • Works Or Services Must Be Of A Reasonable Standard
  • Administration Charges
  • Section 20 Consultation Under the
  • Consultation Regulations
  • Service Charge Demands
  • When Must The Demand Be Served By?
  • Rights To Information Relating To Service Charges
  • Commercial Service Charges
  • Obligation To Contribute To The Service Charge

The white paper, entitled: ‘Comparison of Residential and Commercial Lease Service Charges’ is being released on 13 June 2019. If you would like to receive your free copy, email theknowledgehub@brethertons.co.uk with your name, company and email address. We will subscribe you to our property management email subscription list, but you may unsubscribe at any time. For more details on how Brethertons LLP will protect and process your personal data view our Privacy Policy.

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