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Commercial property charges becoming an ‘issue’

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Despite claims that UK commercial property tenants are more satisfied with their landlords’ service than last year, service charge arrangements continue to bring unneeded friction, the Occupier Satisfaction Survey 2011 has found.

Overall satisfaction levels have increased to 5.4 out of 10 among commercial property tenants, up from 4.9 in 2010. However, commercial occupiers’ satisfaction with service charge arrangements stood at a lowly 4.3.

And while 88% of tenants currently pay service charges for the properties they occupy, almost a quarter stated that either ‘a minority’ or ‘none’ of their landlords provided a service charge budget.

“The level of satisfaction with service charges has shown a marginal improvement but it is still low. It is an aspect of commercial property which needs considerable attention,” said John Story, Chairman of the Steering Group.

“Many tenants, for example, do not receive any information concerning their building’s service charge budget. This is of particular significance, given the requirements of RICS’ Service Charge Code which was published earlier this year.

“This year’s survey results show that the overall level of satisfaction among commercial property occupiers has improved slightly on 2010, but significant issues still remain, particularly with service charges, and environmental matters.”

Overall, 57% of respondents felt that the level of communication with landlords was ‘about right’, with the majority receiving communication every 3-12 months. However, a third of occupiers considered the level of communication with their landlord ‘not frequent enough’.

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Written by Andrew Hodges

September 22, 2011 at 8:41 pm

Posted in Comment, LinkedIn

Tagged with , ,

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