Service charges

Citation

Waterson, G. and Lee, R. (1999), "Service charges", Property Management, Vol. 17 No. 3. https://doi.org/10.1108/pm.1999.11317cab.006

Service charges

Universities Superannuation Scheme Ltd v. Marks and Spencer plc [1999] 04 EG 158

Briefly, the tenant was required to pay service charges based upon the proportion of the landlord's expenditure notionally attributable to the demised premises, calculated in the ratio of the rateable value of the demised premises in relation to the combined rateable value of the whole of the shopping centre in which it was situated. The landlord was required to certify annually the amount of such expenditure and then to calculate the actual service charge. The landlord, in error, significantly undercharged since it had thought that the rateable value of the demised premises was £348,000 whereas in fact it was £848,600. The landlord claimed the amount by which it had been underpaid.

At first instance the claim was denied, Blackburne J holding that the landlord's certificate which included the amount claimed by way of service charge was conclusive as to the amount of monies owed. The Court of Appeal disagreed: the lease required payment of the service charge calculated in accordance with the terms of the lease; the payment of a lesser sum incorrectly calculated did not discharge this obligation and the tenant was therefore liable for the balance.