Service Charge

A service charge is a mechanism whereby a landlord recovers from tenants the cost of maintaining and repairing a building and providing certain services.

Similar in operation to residential multi-tenanted properties, these service charges will usually include such items as:

  • The maintenance and repair of the structure and common parts of the building

  • The provision and associated costs of security and cleaning the building

  • Costs associated with administering and managing the building, however these should exclude costs associated with collection of rent

  • Energy costs for the common parts

  • Insuring the building to its full replacement value. Insurance will often include engineering and terrorism insurance, the latter increasing following recent world events

  • Sinking fund contributions to cover replacement of plant and machinery including the upkeep of common areas


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