Service charge

Business owners feel ‘intimidated’ by steep rise in rents and service charges as they recover from pandemic

Businesses operating from council-owned industrial units feel ‘intimidated’ into signing a longer lease alongside higher rents and service charges.

Businesses have lived in the units at Northern Court, Basford, for a number of years and many are concerned that costs are rising at a time when businesses are struggling due to the coronavirus pandemic.

A number of businesses have therefore come together to raise their concerns with Nottingham City Council, the landlord who provides them with the leases for their units.

Gary Kirk, Ward Demolition Services’ project manager, says he feels “intimidated” into signing a new contract with additional costs added.

They were given a “take it or leave it” deadline of August 31, he claims.

“We have been here for 15 years and the council have been very poor in maintaining the area,” Mr Kirk told Nottinghamshire Live.

“I’m ok with them charging us more for the rent, but what doesn’t satisfy me is that they aren’t very clear and evasive.

“I’m concerned about the service charge. They want us to pay for building insurance. They charge us more but don’t give us anything.

“The old lease was for six months, that’s the big pet peeve, this new lease will be for six years. If our business improves or deteriorates, they expect us to continue paying it or that we found a new tenant.

“But we’re not a real estate agent? Why should we have to? We all feel like we’ve been pushed into a corner.

“The rent increase doesn’t bother me, I understand, it’s the charges that come in that they won’t tell us about.

“They mentioned security fencing and CCTV and it’s not cheap.”

The new contract, seen by Nottinghamshire Live, says the service fee will go towards cleaning common areas, landlord management fees, building structure insurance, landscaping as well as lighting and security in common areas.

Mr Kirk added that he was concerned that building insurance is not cheap and that the council does not allow any selection in which the insurance provider is chosen.

Ian Woodward of Flow Tronix Limited says his rent has gone up by 27% and in some cases for some businesses rent has gone up by 40%.

He added: “Our argument is that we are not against rent increases, although some of us got a 40% increase, the cheek of it is the service charge. My rent went up 2 £000 [per year].

“They talked about gardening services but I have a concrete path. I don’t have a garden. I feel like we can’t come to a compromise and one that neither of us is with. agreement is that they want us to sign a six-year lease agreement.

“We’ll find a lawyer and see where we stand.”

Tony Hook, who works at J&S Joinery Manufacturers, which provides services to Nottingham City Homes, said he received a service charge bill of £1,000.

The companies all say the rise couldn’t have come at a worse time, given that they are “just recovering” from the coronavirus pandemic.

Responding to concerns, a City Council spokesman said: “Tenants of Northern Court in Basford have enjoyed rents well below market average for many years.

“Although we have delayed for a while, we now have to adjust our rents for industrial units like this to market prices and although some of the tenants have already agreed to the new terms, we understand that every business is different and let’s keep talking to others.

“We have provided support to local businesses throughout the pandemic, with some being more affected than others.

“We will always strive to find ways to ensure payments are affordable and we talk to tenants about this, including offering phased increases where appropriate.

“We are also looking to work with tenants to understand and resolve issues raised regarding service charges.”