Service charge

Understanding Commercial Service Fee Breakdowns

I have a long commercial lease on office space in a mixed residential (apartments) and commercial (offices) development, although the commercial and residential units are separate buildings.

We receive a service fee every 6 months from the owner’s managing agent. We receive ground rent inquiries every 12 months from the landlord’s freehold agent.

There were exceptional costs for one of the detached residential buildings due to its riverside position (which the others in the development do not benefit from).

The owner informed us under a section 20 L&T (Landlords and Tenants Act, although we are commercial) of these costs, but said that they would not be distributed among those who benefit from the waterfront position, all the everyone has to pay.

These exceptional costs will result in a doubling of the service charge for this period, so naturally we wanted to check that we had good value for money and that everything was above all edge.

We believe that there are other services that we contribute to in the service fee that we do not receive/benefit from.

We just want to verify that our service fees are fair, reasonable, and whether it’s worth taking further action.

I have done this in other residential developments with great success to the benefit of all tenants and even management agents in other residential developments; identify savings, non-contributing properties and even defend the managing agent when they go beyond their contract with the owner, etc. for them.

Our lease does, however, contain clauses similar to those of the L&T regarding the provision of records, receipts and accounts.

“Keeping accounts, records and receipts relating to the service charges incurred by the landlord and allowing the tenant, on reasonable notice, to inspect the accounts, records and receipts by appointment with the landlord (or his accountants or management agents). ”

We have requested these elements and received some data, but we have not received the complete accounts.

The owner’s agent says he cannot provide us with information about other properties contributing to the service charge due to GDPA/DPA, although we would only like to know the percentage contribution by type (eg. , there are 5x 2 beds contributing X or 2x 1 beds contributing Y) or the property number (not bank details or people’s names) or square footage or anything that breaks them down.

The landlord’s agent also claims that he cannot provide us with the contract between him and the landlord due to commercial confidentiality, although it appears on the service charge and is subject to the lease term above (a record).

We have no way of determining if the service charge adds up to 100% without the accounts or allocation matrix.

We have no way of establishing whether the owner has in fact appointed the managing agent and whether we are receiving the services from him for which we are paying.

We have no way of understanding whether our service fees are fairly distributed.

How can we move forward?

Is there an ombudsman, a tribunal, arbitration or another route?

Should we take him to court? Can we do it ourselves or do we have to take expensive legal assistance? Which court?

If we convince a residential tenant to require the information under L&T, can the managing agent simply cite GDPR/DPA and refuse again?

Your advice is much appreciated.


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