Lawyer Eversheds has warned that disputes between retailers and landlords over service charges are likely to increase as tenants seek to cut their costs.
Retailers at Westfield London last week complained about proposed increases in their service charges of up to 75%, days after the west London shopping centre opened for business.
Australian developer Westfield had told retailers that service charges would be around £8 per sq ft. However, they have now been raised to £14 per sq ft.
Eversheds partner Paul Moorcroft, head of real estate litigation at international law firm Eversheds, said he expected more disputes across the country.
“Retailers are joining forces and really drilling into and challenging service charge expenditure,” he said. “There seems to be an increase in the number of disputes and the number of reported legal cases over service charge generally.
“Retailers have had to grapple with a lot of extra, unexpected costs in recent years and there is a need for cost predictability arising from the occupation of retail property.
“Service charge is one of the biggest areas of concern for retailers in the current climate.”
