When Details Count: How a Lease Clause Saved Our Client Thousands
When reviewing service charge costs, we must always remember that the lease terms are what decides how the liability is calculated. This is especially true when it comes to how costs are shared between occupiers.
In this case, our client’s lease clearly stated that their share of costs should be based on the ‘main floor area only not including the mezzanine’. However, the Managing Agent had been using the full floor area in error for many years.
We spotted the mistake and raised it with the Managing Agent. They agreed that we were right and that they would fix it. However, final resolution was not straight forward, as before the Managing Agent would issue the credits, they wanted to reopen old accounts and spread the cost to other occupiers, instead of the Landlord covering it.
We strongly disagreed. We explained that this was an occupier specific concession in our client’s lease, and it wouldn’t be fair to make other occupiers pay more. Ultimately, the Managing Agent agreed with us. They treated the mezzanine exclusion like a service charge cap, meaning the Landlord would cover the difference.
Thanks to our persistence, we made sure our client wasn’t overcharged, and other occupiers weren’t unfairly affected. In the end, we secured a refund of nearly £90,000 – a great result that shows why it’s so important to check service charges carefully and speak up when something doesn’t look right.
If you’re questioning your service charges – or haven’t questioned them in a while – now might be the time for our team to take a closer look. Complete the contact form below and one of our experts will be in touch.