Service Charges in Commercial Leases & The Impact of The RICS Statement

Contents

In multi-let buildings, service charges are an inherent source of tension between landlords and tenants and have been described as a “potent recipe for expensive and unproductive litigation”. Will the new RICS Statement remove such disputes? Will the courts follow the Statement’s aim that “existing service charge clauses are to be interpreted as far as possible in line with the principles and practices set out here”?

This video looks at commercial service charge clauses, the Statement and the practical impact and lessons to be drawn from case law, including:-

• Is replacement always allowed when a service item is beyond “efficient operation”?
• The role of certification
• Insurance: do you need to ‘shop around’? Havenridge v Boston Dyers or Cos v Nicholson
• Legal and management costs of pursuing defaulting tenants, managing rent reviews, renewals etc – are they ever recoverable?
• Enforcing the landlord’s obligations: Blue Manchester v North West Ground Rents

Learning Objectives

As a result of watching this video, the delegates will:

• Understand when and to what extent replacement and upgrading costs can be recovered through the service charge
• Be able to advise on the machinery for triggering service charge liability
• Understand when the lease and the RICS statement are likely to come into conflict, and possible steps to resolve the conflict
• Be able to advise as to courses of action open to tenants where the landlord is in breach of its service obligations

Speaker

SARAH THOMPSON-COPSEY

Sarah Thompson-Copsey is a former property litigation partner at the firm now known as Dentons, where she acted for and advised many blue chip retail clients, developers and institutions. She is now a freelance legal trainer, lecturing and writing regularly on commercial property topics, with an emphasis on avoiding & resolving disputes. Sarah also works as an independent auditor of legal practices.

Sarah is co-author of Tenants’ Pre-emption Rights: A landlord’s guide to the Landlord and Tenant Act 1987 (Jordans) and Mixed Use and Residential Tenants’ Rights: The Landlord and Tenant Act 1987 and Leasehold Enfranchisement, (Elsevier 2009). She is also on the property consultation board of Practical Law Company and a site editor for the Property Law website at www.propertylawuk.net.