Major Works Challenge: How Understanding Lease Obligations Led to a £24,000 Saving
Imagine receiving an unexpected bill for major works totalling £45,000. That’s exactly what happened to one of our new clients – a multinational food and beverage retailer occupying a high street property. The invoice arrived without any prior notice, consultation or explanation – just a demand for payment totalling tens of thousands of pounds. As part of our onboarding process, we prioritise any immediate concerns. This case was highlighted early on, and rightly so. We successfully challenged the charges and saved our client £24,000.
What exactly had they been billed for?
The works, we were told, totalled £135,525 and the Landlord, who self-managed the property, was looking to recover £45,000 from our client.
We engaged with the Landlord and requested a full priced schedule of works and supporting documents that explained what had been done and why. In the meantime, we reviewed the lease.
What did the lease actually say?
The lease was clear in its terms. Our client was to contribute a fair and reasonable proportion of the Landlord’s costs but only for:
- The structure of the building
- The roof
- Items used in common with other tenants
It was also important to understand the layout of the building. The client occupied only the ground floor and had exclusive front and a rear service door. There were no shared access routes or communal areas, which would play a key role in challenging the works.
What works were carried out?
Once the Landlord shared the breakdown of costs, we got a clearer picture. The total spend of £135,525 was split between the front and rear elevations of the property. The works included:
- Scaffolding
- Flat roof replacement
- Repairs to pitched roof and brickwork
- Replacement of windows
- Replacement of balustrade & stairs
It was these last two items totalling £78,889 that stood out immediately. These weren’t to the structure of the building and are not a common item that all tenants shared.
Challenging the Landlord
We raised our concerns directly with the Landlord. They explained that the works were essential and that no similar investment had been made since 2012. However, we pointed to the lease wording, our client was not liable for elements that weren’t structural or communal.
In response, the Landlord instructed a surveyor to review the lease and advise on recoverability.
The result? A £24,000 saving
The surveyor agreed with our findings: the replacement of windows and the balustrade/stairs didn’t fall within the scope of recoverable costs under the lease. The Landlord:
- Credited the original £45,000 invoice
- Issued a revised invoice for £21,000
Leading to a £24,000 reduction in charges – a large saving for the client, especially so early in our working relationship.
Key Takeaways
This case highlights the importance of not only understanding lease obligations but also how premises are situated within a building. By applying our expertise in lease interpretation, our client gained both significant cost savings and clarity on their future service charge liability.
If you’re an occupier and have concerns about your service charges, get in touch by filling out the contact form below and one of our experts will be in touch.