JARGON BUSTER - SERVICE CHARGE

WHAT DOES A SERVICE CHARGE COVER?"

Typically it will include your share of the cost of maintaining common parts of the building, and a proportionate share of the costs of repair or redecoration of the building. Where the landlord is responsible for insurance, it would also cover your proportion of the cost of insuring the premises.

If major items of equipment need replacement, such as a central heating boiler that serves the whole of the building, your proportion of the cost would probably be charged via the service charge.

Your lease should set out what items come within a service charge. It is important that you fully understand the implications of this part of the lease and what expenditure you might face.

WHAT ARE SERVICE CHARGES?

If you are a tenant, particularly if you occupy only part of a larger building, you will probably have to pay a service charge as well as rent. This charge covers the cost of services that the landlord provides. Service charges for business premises are not specifically regulated by legislation. It is up to you to make sure you fully understand what the service charges entail before you take on a lease.