How are service charges apportioned between units in mixed-use blocks?Make Text Bigger
I own a leasehold retail unit that is one of four along the front of a modern mixed-use building with residential flats above. There is a rear courtyard and car park accessible to and used only by the flat occupants.
The block managers (acting for an RTM company) used to require me to pay service charges towards just the things the shop benefits from (insurance, external repair, window cleaning etc), but recently they have changed it and are now coming after me for contributions towards all costs in the block including the cleaning/electric for flats corridors (I have no access), flats rear garden (I have no access), fire system (doesn’t extend into the shops) etc. Beyond that the charging varies considerably between years, eg one year my unit is charged only a share of costs related to services it benefits from, and in other years a portion of the whole block.
The lease says “…the Property shall bear 25% of the Service Charge Cost properly attributed to the ground floor commercial units” which is unhelpful as it doesn’t indicate the apportionment between resi and commercial, though to my mind it is saying I pay a quarter of costs that benefits the shops and strongly implying the accounts should contain a separate schedule for those costs.
The RICS guidelines on mixed-use apportionment say costs should be apportioned in a way that is fair and considers a) accessibility to services, b) use of services, and c) benefit of services. But what does the law say? The agent is a member of the Property Ombudsman, but I think not ARMA-Q.
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