Thursday, July 16th, 2009 in Commercial, Landlord, News, Residential, Service Charge
A nice article in the Liverpool Daily Post about the lease contract between landlord and tenant in mixed-use properties affecting service charge claims.
The question is whether tenants are able to rely on their lease provisions to force landlords into giving the best value for the services they are obliged to provide?
Best value is an ambiguous concept, particularly where the price paid for shared services may be negotiated several years at a time and may not rise and fall rapidly as market conditions vary. But we like the suggestion that the best Landlords will always be BPF Lease Code compliant.
Wednesday, July 15th, 2009 in Commercial, News, Service Charge
In the current economic climate landlords and tenants will continue to consider in great detail the service charge provisions in leases and to review what expenditure is and is not recoverable. Service charge disputes are likely to become more common according to CMS Cameron McKenna.
This came about after a legal decision of Boots UK Limited -v- Trafford Centre Limited in 2008 when the High Court held that the landlord could pass on the cost of entertainments, Christmas decorations, a Christmas grotto and a large permanent television screen to its shopping centre tenants via the service charge.
The court held that all these items were each a facility, an amenity or an attraction, rather than a form of promotion of the shopping centre and therefore the entire cost was to be included in the ordinary service charge with no contribution from the landlord. In contrast, had these items been classified as a promotion, then the cost of providing them would have had to be shared between the landlord and the tenant. Source Dorsey & Whitney
. A summary is downloadable from Ashursts.
Forsters explain in more detail the items Boots contested and why the judge found against them.
Tags: retail service charge, shopping centre service charge
Thursday, June 4th, 2009 in Residential, Service Charge
The Government has commissioned an independent review into charging and metering for water and sewerage services. This is being run by Defra and Chaired by Anna Walker, Chief Executive of the Healthcare Commission.
In a headline-grabbing reaction, the Property Week says that part of the proposals would leave landlords liable for unpaid water bills from departing tenants.
The review is still at the consultative stage and interested parties have until 28th August 2009 to respond to the interim report.
Tags: residential landlord, water rates
Tuesday, June 2nd, 2009 in Service Charge
It has been reported in Property Week and Retail Week that Westfield Shopping Centre has dropped its service charges for tenants.
The top weighted rate for 2009 of £12.98/sq ft – compared to the original budget projection of £13.94/sq ft that was given to retailers around Christmas 2008.
Driven by ‘unhappy retailers’ who campaigned for a reduction in overheads, it seems this has been achieved by a mixture of cost cutting and streamlining services.
Tags: service charge, shopping centre service charge, Westfield shopping
Thursday, April 16th, 2009 in Commercial, News, Service Charge
The majority of commercial service charge leases are drafted on the basis that the service charge is paid in advance. There are thus large sums of money lying in service charge bank accounts, on which interest accrues throughout the year.
(more…)
Tags: service charges
Monday, April 6th, 2009 in Residential, Service Charge
Property Week Law Report summarises a recent case between the Peabody Trust and Paddington Walk Management. It clarifies the steps that managing agents have to undertake and the associated timeframes in order to recovery service charges.
The case highlights two points: first, the hurdles landlords and management companies face in recovering service charges and, second, why there are so many disputes in this respect.
Summing up: Paddington Walk Management v Governors of Peabody Trust
The trust disputed a claim of £160,000 for service charges by Paddington Walk because of late claims and a lack of consultation.
The county court held for the trust on the points of lateness and lack of consultation.
It said managing companies needed to comply strictly with the Landlord and Tenant Act 1985.
Tags: service charge law
Monday, April 6th, 2009 in Landlord, Service Charge
An ongoing discussion between large retailers and the UK’s biggest landlords (members of the British Property Federation) has surfaced because retailers object to paying rents quarterly in advance saying this causes them cash flow issues. Responding, the BPF landlords ran a pilot scheme in four shopping centres to reduce overheads through service charges by delaying maintenance projects and ”and by mutually identifying changes to service requirements.”
This is very interesting because it’s been historically the landlord who sets out the level of ‘services’ that tenants receive in a shared occupancy building.
What if the tenants were able to choose the level of service they wanted in future – for example, weekly cleaning rather than daily or increased security cameras / guards near their stores. A menu-driven approach would mean that the days of one-size-fits-all may end and a more flexible service could be delivered enabling retailers to pick and choose from a range of services to suit their particular needs.
the areas where the cost review is focusing its attention include:
- Engagement with retailers
Hours of operation
Cleaning and environment
Waste management
Security
Administration, procurement and purchasing of services
Plant and fabric maintenance
Utilities and energy management
Customer service
Marketing
The BPF press release
Tags: British Property Federation, retail service charge
