The challenges of 2020 are clear to all and the impact will remain throughout 2021, bringing cost control in to sharp focus. When it comes to Service Charges, the RICS Professional Statement provides that occupiers should be consulted on budgets and property managers “should ensure that the standard of service provision (and therefore cost to occupiers) does not unnecessarily exceed the reasonable requirements and needs of occupiers”.
With footfall, attendance, and occupancy levels down, the requirements and needs of office occupiers are at a reduced level. Landlords are also experiencing challenges with a gap in income versus costs incurred as well as potential for an increasing exposure to service charge through voids. So, it is in all parties’ interests to limit service charges in the short term for 2021 as well as looking for longer term opportunities.
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