Search

How can we help?

Icon

Service charges: challenging a landlord’s certificate

It is very common for a commercial lease to stipulate that the landlord’s certificate stating the total cost of services provided under the lease, and the service charge payable by the tenant towards those services, is conclusive and binding on the tenant in the absence of manifest error or fraud.

Such a provision was considered in May this year by the High Court in the case of Sara & Hossein Asset Holdings Limited -v- Blacks Outdoor Retail Limited.  The Court decided that this wording meant that the landlord’s certificate produced by the landlord was conclusive as to the amount of the costs incurred (except for manifest or mathematical error or fraud) but was not conclusive as to whether those costs, as a matter of principle, fell within the scope of the service charges payable by the tenant under the lease.  This therefore opened the door for a challenge by the tenant.

The Court of Appeal has now, in a Judgment handed down on 13 November 2020, considered the appeal in this case and come to a different conclusion.  The Court of Appeal decided that the landlord’s certificate was conclusive both as to the amount of the service charges and the issue of whether those costs fell within the scope of the service charges payable by the tenant.  Accordingly, except where there was manifest or mathematical error or fraud, the tenant was unable to challenge the certificate and obliged to make payment of the amount certified.

The Court of Appeal recognised that this might put a tenant in a difficult position, but made the point that the tenant “would be well advised to consider very carefully before agreeing a lease in these terms”.

The Court of Appeal recognised that this might put a tenant in a difficult position, but made the point that the tenant “would be well advised to consider very carefully before agreeing a lease in these terms”.

This underlines the crucial importance for tenants to consider the detail of their service charge provisions before agreeing the terms of a new lease. However, the decision is not fatal to all challenges by tenants to their service charges: each case will depend on the exact wording of the landlord certification provision and these can vary significantly.Furthermore, apart from the fraud and mistake exception, some leases contain a dispute resolution provision enabling the tenant to challenge the service charges  Accordingly all tenants should make it their practice to check carefully all service charge statements provided to them by their landlord as well as the terms of their lease before payment.

Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

Author profile

About this article

Read, listen and watch our latest insights

art
  • 26 October 2026
  • Corporate and M&A

Shareholders’ Agreements for Founders and Investors – SHA Series Part 3 of 5

A shareholders’ agreement is arguably one of the most valuable corporate governance agreements (along with articles of association) in any private UK company with more than one shareholder.

art
  • 23 October 2026
  • Litigation and dispute resolution

Section 172 Companies Act 2006: Key lessons from Saxon Woods v Costa

The Supreme Court’s decision in Saxon Woods v Costa UKSC 21 clarifies directors’ duties under Section 172 Companies Act 2006, confirming that good faith requires both honest belief and appropriate conduct.

art
  • 19 October 2026
  • Immigration

Right to Work Checks: Are UK businesses becoming immigration enforcement officers?

The UK’s Right to Work regime has undergone a significant expansion, with changes taking effect from 1 October 2026.

art
  • 15 October 2026

Clarkslegal celebrates continued success in Chambers and Partners UK 2027

Clarkslegal is delighted to announce that we have once again been recognised by Chambers and Partners UK 2027, celebrating continued success across the firm and a number of enhanced individual rankings.

Pub
  • 15 October 2026
  • Privacy and Data Protection

Data breaches and ICO investigations: Responding with confidence

In this podcast Harry Berryman and Zahra Navarro discuss recent ICO enforcement action, common causes of data breaches, and the practical steps organisations should take to respond effectively when incidents occur.

art
  • 14 October 2026
  • Litigation and dispute resolution

London Court of International Arbitration v International Chamber of Commerce: Key differences

Compare LCIA and ICC arbitration rules, costs, confidentiality provisions and expedited procedures. Learn the key differences between these leading international arbitration institutions and how to choose the right option for your commercial dispute.