Cases - St Modwen Developments (Edmonton) Ltd v Tesco Stores Ltd

Record details

Name

St Modwen Developments (Edmonton) Ltd v Tesco Stores Ltd

Date

(2006); [2007]

Citation

EWHC 3177; 05 EG 166

Keywords

Commercial property - landlord and tenant – service charge – management fees – terms of the lease – common practice to charge management fees at 10% - whether the landlord’s right to charge management fees at 10% should be determined by the terms of the lease

Summary

St Modwen acquired the freehold reversion to premises in the Edmonton Green shopping centre from the borough council. The landlord brought proceedings to establish its entitlement to: (i) service charges certified by its finance director in place of the borough treasurer; (ii) a contribution to the cost of refuse collection for other tenants, in circumstances where the tenant disposed of its own refuse; and (iii) a 10 per cent management fee.

It was held that although the addition of 10 per cent for management fees was a common modern practice, and that in many other cases the parties would be happy to accept the adding of a general percentage as a rough and ready approach, the landlord's right to charge such fees was determined by the terms of the lease.

The judge commented that 10 per cent as a percentage has no magic value and that the landlord was not entitled to a figure of 10 per cent taken, so to speak, from the air in the absence of any investigation into the cost of providing the services in question.