Jurisdiction(s):
United Kingdom

Key definition

Costs definition

What does Costs mean? In litigation, costs are the legal fees, disbursements, court fees and VAT incurred in bringing, defending or appealing a claim, and the sums a court or tribunal may order one party to pay another for those liabilities. The concept is governed by procedural rules and case law rather than a single statutory definition: England and Wales (CPR 44–47), Northern Ireland (RCJ Ord 62), Scotland (where the equivalent term is expenses), and Ireland (Legal Services Regulation Act 2015 and the Legal Costs Adjudicators). The general approach is broadly consistent, subject to local terminology and procedure. Typical features include the discretionary rule...

Negotiating Commercial Lease Service Charges: Lawyers’ Guide to Clauses, Exclusions, Caps, Apportionment, RICS Standards, and Interaction with Repair, Insurance and ADR (England and Wales)

Published by a LexisNexis Property expert

Practice notes

Negotiation Guide

This Negotiation Guide sits within the Practical lease negotiation collection. Refer also to Practice Note: New starter guide—entering into new commercial leases. For multi-let buildings, it is prudent for the landlord to manage structural repairs, maintenance of common parts, and delivery of shared services, with the expenditure recovered from occupiers via a service charge. This is achieved through a service charge clause (or schedule). A standard commercial service charge clause will cover:

the landlord’s duty to deliver the services
a schedule of service charge items the landlord may recover from the tenant
a requirement for the tenant to contribute the appropriate proportion of those costs
workable procedures for payment and end-of-period reconciliation

These provisions clarify responsibilities and support coherent estate management by the landlord, whilst ensuring each tenant funds a proportionate share of the expenditure. This guide examines the principal components of a commercial service charge clause that can be incorporated into a business lease. It proceeds on the basis that the premises include no residential units. In a mixed-use asset there will typically be further issues around service provision and recovery of charges, including the potential impact of the Building Safety Act 2022—see Practice Notes: Residential—statutory limitations on recovery...

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Web page updated on 21/05/2026

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