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Contracts and Law

Service charges and tenant alterations




Commercial property landlords have a duty to maintain, repair and keep in good working order the common parts of the premises. The cost of meeting this obligation is recovered by the landlord through the collection of service charge payments made by the buildings' occupiers.

The process is usually straightforward with each occupier paying a set apportionment, most often based upon a floor area basis. But what happens where a tenant increases or decreases the floor area of the demised premises – for example by installing a mezzanine floor? Should the landlord adjust the service charge apportionments to reflect the change in floor area? In this programme we consider the options.

Main contributor: Peter Forrester (Savills Ltd).

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