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Is a tenant obliged to pay for all reasonable service charge expenditure incurred by the landlord?

Not unless the lease creates that obligation.

In some instances the lease does not oblige the tenant to pay a contribution towards all of the costs of the work the landlord is obliged to carry out. In the case of Riverlate Properties Limited v Paul [1975] Ch 133, CA the court held that where the lease obliged the tenant to pay for the landlord’s reasonable costs incurred under its obligations in clauses 6(b) to (d) of the lease the tenant did not have to pay for the costs incurred by the landlord under clause 6(a) as the lease did not include an express obligation for the tenant in relation to 6(a).

Recommendation

Tenants and landlords should carefully read the lease to fully understand their rights and obligations. Leases can contain anomalies and parties to a lease cannot assume the lease will be effective in recovering all of the costs a landlord may be obliged to incur. If in doubt seek specialist legal advice.

Jonathan Waters is the founder of Helix Law. Before qualifying as a Solicitor he worked in industry and in investment banking for over a decade. He was also the Partner in charge of Commercial Litigation, Employment Law and Property Litigation at Stephen Rimmer LLP. Jonathan has wide experience of helping and advising businesses to avoid or to deal with commercial disputes and in particular construction disputes.

 

This article is written to raise awareness of the issues it discusses and it may not be updated after it is first written, even if the law changes. It is not intended to be legal advice and cannot be relied on as such. Helix Law is not responsible or liable for any action taken or not taken as a result of  this article. If you think the matters set out affect you and you wish to apply them to your particular circumstances then we are happy to give you free initial telephone advice. 

Contact Helix Law on 01273 761 990 or email: [email protected]