THE news that the shopping centre owner Westfield has managed to cut the service charge at its London Shopping Centre, following a campaign from retailers, is a minor victory for disgruntled traders unhappy at paying over the odds for their service charge.

The question is whether tenants are able to rely on their lease provisions to force landlords into giving the best value for the services they are obliged to provide?

Contract remains king in purely commercial properties. Huge difficulties can arise in residential and mixed-use schemes, as those service charge arrangements are so heavily legislated.

Historically, landlords have had to make the drafting of their leases ambiguous, in order to claim for everything they wanted to.

Sweeper clauses have been used as “get out of jail free” cards, should a tenant expose a gap in the services the landlord can charge for.

Thankfully for tenants, case law has chipped away at the ability of landlords to charge what they like for such services, and has made them think more carefully about the drafting of their leases and the methodology of calculating the amounts charged.

Advances have been made with the British Property Foundation’s Code for Leasing Business Premises, and the RICS 2006 Code of Practice on Service Charge in Commercial Premises, although the extent to which these have been adopted is questionable.

It is hoped that, one day, being Lease Code-compliant will be seen as the kite mark for good landlords.

Institutional landlords will now have to get used to the prospect of shorter lease terms, realistic and accountable service charge provisions, and the fact they will not be able to pass on all costs to tenants.

What landlords really need to do on an acquisition is to look beyond the current leasing structure and focus more realistically on the re-letting prospect of the building once the current leases expire.

In essence, does a landlord want an occupied building, albeit on slightly less favourable terms than they would like, or an empty building which they are going to be solely responsible for?