Leases as Inhibitors of Best Practice in Service Charge

The relationship between the owner and an occupier of a commercial property is determined by the lease, inasmuch as it sets out the legally enforceable duties and obligations of each party. However, it is only that, a legal framework; it is not a practical management handbook on how best to operate the premises and generate an amicable business relationship. This paper considers the role of the lease in reinforcing and disrupting the generation of best practice within real estate management. The paper examines actual leases to understand the service charge and how data pertinent to it is collected, disseminated and interpreted by both parties in carrying out their activities within and about the property. This is then benchmarked against provisions of the Service Charge Code of Practice. Despite a number of incarnations of a code of practice on service charges during the lifetime of the leases examined, the research finds a troublingly small uptake of its ideas within new leases The findings predict future problems in the practical management of multi-tenanted properties, coupled with a call that leases are written to the Code’s requirements. No such lease examination has been undertaken to date.