Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Service charge definition

What does Service charge mean? A service charge is a variable payment made by a tenant, leaseholder or other occupier to a landlord, owner or management/factoring company to recover the cost of providing, maintaining, repairing, insuring and managing common parts and shared services in a multi‑occupied building or estate (residential or commercial). It is typically budgeted annually, demanded on account, and later reconciled by a balancing charge or credit. Apportionment is usually set by the lease or title (for example, a fixed percentage, floor area, rateable value or a “fair proportion”). Demands commonly include managing agent fees and contributions to reserve/sinking funds, and...

Commercial service charges: certification, ‘pay now, argue later’, timing and apportionment—procedural pitfalls and the 2025 RICS Service Charge Standard (England and Wales)

Published by a LexisNexis Property expert

Practice notes

If a certificate is required to determine the Service charge, Urban Splash Work Ltd v Ridgway and another [2018] UKUT 32 (LC) confirms there is no overarching rule that providing certified accounts is, or is not, a Condition precedent to liability for service charges (rather than simply part of the payment ‘machinery’)—the outcome depends on the exact lease wording and there is no generally applicable principle. Landlords should take care not to draft around circumstances personal to them, which could render the certification procedure unworkable once the reversion is assigned.

In that event they would need to sue to recover the service charge because there would be no contractual route to obtain it (and, depending on the drafting and the circumstances, recovery might not be possible at all). There must be an express clause creating a duty to pay on account, as such an obligation is unlikely to be implied. Subject to the terms of the particular lease, where the certificate is stated to be conclusive the court will probably construe that as requiring the tenant to ‘pay now, argue later’. That treats the account as final for the time being, though the tenant may, in due course, if appropriate...

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Web page updated on 21/05/2026

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