Don't turn a blind eye in 2012 to service charges on commercial property.
Have you ever wondered whether your business is paying too much service charge on your commercial property? If you are reading this article then perhaps you have thought about it but did not know what to do.
If you are a business owner or a finance director it is likely to be your responsibility to sign off the service charge payment to the landlord every three months. The buck also stops with you when the landlord issues a request for payment of a balancing service charge. If you have any concerns about signing off a service charge invoice then shouldn’t you do something about it?
On the 1st October 2011 The Royal Institution of Chartered Surveyors (RICS) issued the second edition of a code of practice for Service charges in commercial property.
You can download a copy and have a read I have posted a link at the bottom of this article. It has the status of a guidance note so does not override the terms of your lease. Another thing to do is to look closely at the terms of your lease to check the landlord is invoicing you in accordance with those terms.
This is where things become tricky. Unless you have a lot of experience in dealing with commercial property leases i.e.are a chartered surveyor or a lawyer specialising in commercial property then it is unlikely that you will be able to:
- Interpret all of the applicable lease terms fully and accurately.
- Establish how much of a case you have to legitimately challenge your landlord over individual costs contained within the service charge.
- Form a strategy for challenging the landlord and execute it successfully.
I am not saying that it is impossible for you to do this. It is just difficult and time consuming. Imagine for example a surveyor trying to do your job. He could muddle through part of it but he would certainly make mistakes some of which could be costly. Your time is quite frankly better spent on doing what you do best and not embarking on a new time consuming project in an area outside of your core expertise.
If you want more information then read my article below: Service charges - Top Ten Tips for Tenants.
Alternatively you can just turn a blind eye and continue to pay the landlord whatever service charge he invoices.
Useful resources:
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