- Original Poster
- #1
I have been looking for somewhere local for business premises and found the perfect unit
it was a large car workshop and has been divided into 11 units, the one I was interested in was advertised at £100 + VAT per week (still advertised at this now on the letting agents site 5 weeks later)
when I queried the property I was informed it was a mistake and it would be £110 + a week - i was a bit put out but agreed to the new rent amount, as I wanted the unit
it was perfect and I agreed to go ahead, the contract outline came through later that day with the following -
The lease shall include service charge contribution towards
maintenance, repair, upkeep, cleaning, security, water, management
fees etc of the common areas in accordance with the standard estate
provisions. The due proportion applicable is 12.3% of the total
expenditure. Payable on demand.
and this
The Landlord to insure the premises and the premium allocated will be
charged back to the Tenant. The Tenant will recharge the appropriate
apportionment to the Sub-Tenant. Payable on demand
now there are 2 existing business that don't pay this and they both have their own water/wc facilities where as I would have to use the shared communal toilets (not that I would unless desperate) and have no water to the unit
neither the buildings insurance or service charge were in the advert (still not in it) and off course I agreed to the extra £10 week rent to what was advertised,
Now I really wanted the unit, it's perfect BUT not that much that I would leave myself open to unlimited costs.
there is no mention of a service charge in the agents advert for any of the premises, but when I queried if it would be capped as I could be opening myself up to unlimited charges on an unknown service charge
The agent replied back and tried to justify it, there are 13 units and 1 flat on the premises, 2 units and the flat have long term tenants - I know the current business tenants don't pay service or buildings insurance,
now some of the units are large and look like they will have car services in them so they are likely to make a mess - ie oil spill etc, which I will be expected to pay towards, this is the agents response
The service charge is a contribution amount to any charges incurred for works in the common areas (the driveway, toilets, courtyard etc), and is split on an apportionment basis as per the square footage of the unit. Service charge costs are only charged if there is any work undertaken. For example, if the common toilets become blocked and a plumber is needed and a charge of £150 is incurred, your charge would be £18.45 as this is 12.3% of the costs incurred. The likelihood of any large charges is incredibly slim given the good condition of the common parts. The largest cost would be for re-tarmacking of the driveway and courtyard however this was done in summer last year, so very unlikely any maintenance will be required for 10+ years. A breakdown of the service charge is attached.
Building insurance is as standard in every commercial letting. The Landlord insures the building and the tenant reimburses the cost to the Landlord. In this instance, the Landlord will insure the entire site and you will be recharged an apportionment of 12.3% of the overall cost due to the square footage of your unit. We understand the cost for insurance for the whole site is circa £700 for the year, with this in mind your approximate cost will be £86.10 for the year. I’ve requested a copy of the buildings’ insurance certificate from the Landlord and this will confirm exact costs, I can provide this to you.
The above points are standard estate charges and standard commercial letting charges, and won’t be waivered. Do let me know if you do not wish to proceed and we will re-market the premises.
Now what happens if for example a delivery lorry smashes into the toilet block and it needs rebuilding, this could costs £10k plus so i'd be expected to pay £1230 for something out of my control, I only plan to use it for storage, it has no water facilities, no phone line just electric, is really is just storage, plus they are still advertising at £100 pr week when they wanted £110 now,
my main issue is the service charge is uncapped so could end up being £1000's and i'm not going down that route, and I really think that is why possible tenants have now dropped out, as at one point all the units were had tenants ready to sign up, now I think only 2-3 are still going ahead
I guess my point is, is it legal to have an uncapped service charge? and to not advertise it too.
it was a large car workshop and has been divided into 11 units, the one I was interested in was advertised at £100 + VAT per week (still advertised at this now on the letting agents site 5 weeks later)
when I queried the property I was informed it was a mistake and it would be £110 + a week - i was a bit put out but agreed to the new rent amount, as I wanted the unit
it was perfect and I agreed to go ahead, the contract outline came through later that day with the following -
The lease shall include service charge contribution towards
maintenance, repair, upkeep, cleaning, security, water, management
fees etc of the common areas in accordance with the standard estate
provisions. The due proportion applicable is 12.3% of the total
expenditure. Payable on demand.
and this
The Landlord to insure the premises and the premium allocated will be
charged back to the Tenant. The Tenant will recharge the appropriate
apportionment to the Sub-Tenant. Payable on demand
now there are 2 existing business that don't pay this and they both have their own water/wc facilities where as I would have to use the shared communal toilets (not that I would unless desperate) and have no water to the unit
neither the buildings insurance or service charge were in the advert (still not in it) and off course I agreed to the extra £10 week rent to what was advertised,
Now I really wanted the unit, it's perfect BUT not that much that I would leave myself open to unlimited costs.
there is no mention of a service charge in the agents advert for any of the premises, but when I queried if it would be capped as I could be opening myself up to unlimited charges on an unknown service charge
The agent replied back and tried to justify it, there are 13 units and 1 flat on the premises, 2 units and the flat have long term tenants - I know the current business tenants don't pay service or buildings insurance,
now some of the units are large and look like they will have car services in them so they are likely to make a mess - ie oil spill etc, which I will be expected to pay towards, this is the agents response
The service charge is a contribution amount to any charges incurred for works in the common areas (the driveway, toilets, courtyard etc), and is split on an apportionment basis as per the square footage of the unit. Service charge costs are only charged if there is any work undertaken. For example, if the common toilets become blocked and a plumber is needed and a charge of £150 is incurred, your charge would be £18.45 as this is 12.3% of the costs incurred. The likelihood of any large charges is incredibly slim given the good condition of the common parts. The largest cost would be for re-tarmacking of the driveway and courtyard however this was done in summer last year, so very unlikely any maintenance will be required for 10+ years. A breakdown of the service charge is attached.
Building insurance is as standard in every commercial letting. The Landlord insures the building and the tenant reimburses the cost to the Landlord. In this instance, the Landlord will insure the entire site and you will be recharged an apportionment of 12.3% of the overall cost due to the square footage of your unit. We understand the cost for insurance for the whole site is circa £700 for the year, with this in mind your approximate cost will be £86.10 for the year. I’ve requested a copy of the buildings’ insurance certificate from the Landlord and this will confirm exact costs, I can provide this to you.
The above points are standard estate charges and standard commercial letting charges, and won’t be waivered. Do let me know if you do not wish to proceed and we will re-market the premises.
Now what happens if for example a delivery lorry smashes into the toilet block and it needs rebuilding, this could costs £10k plus so i'd be expected to pay £1230 for something out of my control, I only plan to use it for storage, it has no water facilities, no phone line just electric, is really is just storage, plus they are still advertising at £100 pr week when they wanted £110 now,
my main issue is the service charge is uncapped so could end up being £1000's and i'm not going down that route, and I really think that is why possible tenants have now dropped out, as at one point all the units were had tenants ready to sign up, now I think only 2-3 are still going ahead
I guess my point is, is it legal to have an uncapped service charge? and to not advertise it too.
