Leases: Service charges - who is footing the bill for re-opening shared buildings?

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03 June, 2020

As the government eases lockdown restrictions and shops and offices begin to re-open, tenants will naturally be considering what their landlords are doing to ensure that multi-let buildings are safe for them, their employees, customers and visitors to return to. Conversely, landlords will be considering what their new obligations to their tenants will be. Both will no doubt be considering how the additional costs of any new services will be paid for:

Cleaning

An initial deep clean of common parts followed by more frequent and thorough cleaning and sanitising of common parts is to be expected. New, touch-free, hand sanitising stations are likely to be the norm, replenished frequently, to ensure that people using high-traffic areas such as doors, lifts etc. are doing so with clean hands.

Social distancing

Whilst tenants may make their own arrangements to stagger start and finish times to try and avoid congestion at peak times, and the number of occupants may be lower due to increased working from home, landlords will still need to manage social distancing in communal areas such as reception, WCs, lifts etc. Some areas such as communal kitchens and break-out areas may need to be closed altogether. Extra signposting, floor markers and perhaps even security staff may be required to remind visitors to adhere to keeping a 2m distance from others and to limit numbers using confined spaces such as lifts.

Systems

Buildings may have had their heating, lighting and air-conditioning switched off since lockdown began back in March and dormant systems may need servicing or testing before they are ready to spring into life as people return to the building.

At whose expense?

Supplying these extra services will mean increased costs are incurred by landlords. Whether these costs are recoverable from tenants or not will depend on the terms of individual leases and whether the specific heads of expenditure listed or any sweeper clauses such as costs incurred 'in complying with all applicable laws' or 'in the interests of good estate management', are sufficient to catch them. Even if they are, careful consideration will need to be given to any service charge caps, inclusive rents or agreed exclusions which might affect the amount recoverable from tenants (or certain tenants).

Our experienced team of commercial property solicitors here at Forbes are able to help you with interpreting the service charge provisions in your Lease.

For more information contact Helen Marsh in our Commercial Property department via email or phone on 01254 224217. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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