Nick Millican On Service Fees For Commercial Leasehold Tenants

Nick Millican works in the U.K. real estate industry, where he focuses on managing commercial real estate investment properties. The agent, as someone in the commercial real estate industry, his interest peaked when he noticed commercial leaseholders have been complaining online about landlords who are overcharging for the leaseholder’s service fees.

Commercial tenants typically pay a service fee so the landlord can manage the property. Fees may include maintaining common areas if a tenant leases one office out of many or insurance if the tenant occupies the entire property. Nick Millican adds that the terms of the service fee, how much it will be, and how the leaseholder must pay vary.

Leaseholders may not manage the services that the service fee covers. They must trust their landlord to assess the fee fairly, but some leaseholds find their landlord overcharging for insurance, fire safety inspections, and more. As Nick Millican recalls, this is the way the real estate market works.

While the U.K .government has said they were eliminating leaseholder agreements, the bill is being watered down. Leaseholders can be stuck with outrageous service fees for many years, sometimes up to 99 years. And this is something that ral estate agents such as Nick Millican must be aware of in order to successfully help tier clients.
The First Tier Tribunal can help tenants who feel they are being overcharged, but this can be expensive and take many years. All landlords do not overcharge tenants, Nick Millican finally states. According to his own experience, some are honest and want to maintain the property, but some view it as a way to make more money above the rent.