Service charges and tenant alterations (ARCHIVED)

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The fair and equitable apportionment of the costs incurred by a landlord in dealing with common parts, works and services is often relatively straightforward. The most common and simplest method of apportionment is based on floor area, i.e. the proportion the tenant bears is the ratio that the floor area of the premises bears to the aggregate floor area of the whole building or scheme.

However, where a tenant carries out alterations to premises which increases (or decreases) the floor area of the premises (e.g. the installation or removal of a mezzanine floor within the tenant's demise) issues can arise as to the extent to which the tenant's proportion of the landlord's service charge should be increased or decreased, and the potential impact upon the proportion of the service charge payable by other tenants.