Commercial service charge disputes

Service charge disputes in commercial properties can create significant financial and operational challenges, impacting both landlords and tenants.

At Moore Barlow, our solicitors specialise in resolving these disputes, ensuring that charges are fair, transparent, and accurately calculated. We provide expert advice and representation to help you navigate these issues and reach amicable agreements.

Our approach involves a detailed review of service charge accounts, lease terms, and relevant legislation. We aim to resolve disputes through negotiation and mediation, but are prepared to pursue litigation if required. By working with Moore Barlow, you can ensure that your commercial service charge disputes are managed effectively and efficiently.

Can a service charge be disputed?

Yes, service charge can be disputed if it’s believed to be unreasonable, incorrectly calculated, or not in line with the terms of a lease. Disputes can be resolved through negotiation with landlords and tenants, or, if necessary, through formal legal channels such as mediation or court proceedings.

What are commercial service charge disputes?

Commercial service charge disputes arise when tenants and landlords disagree on the calculation, allocation, or reasonableness of service charges in commercial properties. These disputes often require legal clarification of lease terms and transparent accounting to resolve.

Common issues in service charge disputes

Service charge disputes typically stem from a few key areas of contention:

• Calculation errors: Mistakes in calculating the service charges can lead to disputes, particularly if the tenant believes they are being overcharged.
• Lack of transparency: If landlords fail to provide clear, detailed breakdowns of the charges, tenants may question their validity.
• Reasonableness of charges: Tenants may challenge charges they believe are excessive or unrelated to the services actually provided.

These disputes can be time-consuming and costly, making it crucial to address them with expert legal support.

Do commercial service charges have to be reasonable?

Yes, commercial service charges must be reasonable. Landlords are required by law to ensure that the charges reflect actual costs incurred and are fair. Tenants have the right to challenge charges they believe are excessive or unjustified.

How to challenge a commercial service charge

To challenge a commercial service charge, begin by thoroughly reviewing your lease agreement to understand the specific terms governing service charges. The lease will outline what charges are permissible, how they should be calculated, and when they can be applied. This initial step is crucial in determining whether the charges being levied are in line with the agreement you signed.

Once you have reviewed the lease, request a detailed breakdown of the service charges from your landlord. This breakdown should include an itemised list of expenses and how each cost was calculated. Compare these charges with previous years to identify any unusual increases or discrepancies. If any charges seem excessive, unclear, or unrelated to the services provided, raise these concerns directly with your landlord, seeking clarification or adjustment where necessary. If the issue remains unresolved, it may be wise to consult a solicitor experienced in commercial property law.

A solicitor can help you negotiate with the landlord or, if needed, take formal action to resolve the dispute.

Can a tenant refuse to pay a service charge?

Refusing to pay a service charge is not advisable without taking proper steps. If it’s believed the charge is incorrect or unreasonable, it’s better to first raise the issue with your landlord and seek a resolution. Non-payment could lead to legal action, so it’s important to dispute the charge formally if necessary, while continuing to pay any undisputed amounts.