Service charge on commercial property

[danler]

Hi
Don't know where we stand with this so I am hoping someone might have abit more info.

2 years ago we were in a commercial property for our business, the whole property was occupied by about 11 busines's. We were in the property for 6 years and had to pay a service charge of around 1000 pounds a year for maintence to the building. After a massive flood from the roof that came through 2 floors my OH decided to only pay 800 pounds of the service charge as the landlord refused to compensate for the flood which damaged stock and flooring. The landlord issued a claim in court in court for the remaining 200 pounds. I looked at the lease which we signed at the beginning and it stated that the landlord would issue a list of repairs every year with costs, if the costs were less than what we had paid then a refund would be given to each business there. Also if the charges were higher then the business would have to split the costs.
In the six year that we were there no lists were given to us and any other business there. We wrote to the solisitors and mentioned this.. The reply cam back WITHOUT PREJUDICE and basically dont go there you are opening a can of worms. My OH waited until the last minute and paid the 200 pounds.

Does anyone think I should repoen this matter and ask for a list of repairs and charges and may be get back some of the service charge we had paid or am I opening a can of worms.

Thanks in advance

Danler

[MrShed]

Can I suggest you post here: LandlordZONE Property Forums

Commercial property is a fairly specialist subject, and few if any people here will have any knowledge of it. I know of certain experts on the field who post at the above forums however.

[danler]

Thanks MrShed, I'll be onto that tomorrow, bed time for me.. early start tomorrow.

[strangewayofsavin]

there was a similar incident in a small ind est where I had my business, same sort of thing with the flood. The repairs to the building are the Landlords responsibility, although your stock or computers etc should be covered on your business insurance.

[MrShed]

Again, this is a very complex area of law. However, one thing I do know is that, unlike residential properties, it is not neccessarily the case that the landlord is responsible for repairs. It is entirely dependant upon the contract and certain other factors.

[citizen1976]

I should start by saying that I am a management surveyor so I do have the relevant knowledge here.

Firstly check your Lease for the exact detail of the repairing obligations. Make sure that the roof maintenance comes under the Leaseholders (landlord/freeholder) covenants and not the Lessees (Yours).

It sounds from what you have said that it is the Leaseholder who is responsible, otherwise I am sure he would not have carried out repairs.

The Leaseholder, although responsible to carry out repairs also has the right to recover any costs for doing so at the end of the year through the Service Charge.

The Leaseholder is most likely obliged to insure the building, but you are responsible to insure your stock/contents/loss of trade etc.

This is all fairly standard clauses for a commercial lease, and is actually detracting from the real claim here.

Although the Leaseholder is in breach for not issuing annual statements of account (within 6 months of the year in which the costs were incurred) this is a fiarly minor issue.

I feel your best route of action is a claim that the Leaseholder failed to properly maintain the structure (a roof doesn't suddenly suffer a major leak if regularly inspected and maintained) and therefore is inbreach of their covenant, causing actual quantifiable damages to your business. Should be a fairly straighforward claim really. The main problem possibly being that you have now paid and not dealt with the issue when it actually happened, but still worth trying to reopen the case I feel.

I have hopefully given some useful advice, but must stress that without seeing a copy of the Lease I have had to assume quite a bit based on my knowledge of standard clauses.

Cheers,