Are you a landlord?
A broad range of factors should be considered when setting, apportioning, and recovering service charge costs.
Getting the figures right is of real significance to landlords and their occupiers. Our team mitigate the risk of tenant disputes or needing to refund incorrectly demanded service charges. We ensure compliance with lease terms and best practice as well as identifying additional income opportunities.
Questions to consider as a landlord:
Does your service charge recovery comply with lease terms for each occupier?
Are you complying with best practice?
Are you planning major works - and is everything recoverable?
Have you considered the benefit of each service to each tenant?
Are you recovering everything that you can from your service charge?
Risk mitigation
Whether it’s a portfolio or a single site, we review the service charge costs you are recovering from tenants to make sure they are:
· Recoverable under the terms of the lease
· Reasonable
· Provide value for money
· Benefitting the occupier
· In accordance with best practice
· And that the calculations are correct
If the service charge has manifest errors, you may be due a refund.
Under the Statute of Limitations, we can go back up to 6 years (5 in Scotland) to obtain a refund on your service charges where there is an error and a refund is due.
Nothing can override the terms of the lease. Each lease is unique, and the basis for recovery, and how service charges are to be administered is outlined within. This includes recoverable items, caps and apportionments, and any exclusions. Landlords and occupiers must abide by these provisions. We have extensive experience in reviewing leases to ensure recovery is correct.
Best practice
The main aim of the RICS Professional Statement for Service Charges in Commercial Property is to ensure that service charges are transparent, fair and uniform.
We can help to make sure that you are complying with the guidelines and mandatory elements of this statement.
As part of our portfolio reviews, we ensure that all budgets and reconciliations are issued within the timescales set in the Professional Statement.
We have a wealth of data that we use to benchmark service charge costs to see whether your building is running at a similar level to other comparable sites.
Benchmarking service charges helps you to understand whether the costs represent value for money in the current market. Where costs are running higher, we can help you to gain an understanding of what is driving the costs up and advise how to mitigate the risk of a tenant dispute.
Sub-tenant recovery
We review sub-tenant portfolios to establish:
• What service charge and insurance charges can be recovered
• Apportionments and amounts to pass through
• How to ensure compliance with best practice
Our reviews ensure maximum recovery and income of your pass through costs.
Benchmarking
We have a wealth of data that we use to benchmark service charge costs to see whether your building is running at a similar level to other comparable sites.
Benchmarking service charges helps you to understand whether the costs represent value for money in the current market. Where costs are running higher, we can help you to gain an understanding of what is driving the costs up and advise how to mitigate the risk of a tenant dispute.
Maximising recovery
Are you recovering everything that you can?
A review of your property could result in the ability to increase your recovery and therefore reduce your own liability.
Tenant disputes
We can help where tenants are disputing the service charges demanded, providing recommendations on your position and how to respond. We can either act on your behalf, or give you the tools needed to resolve the dispute.
