Service charges are likely to become hotly contested in light of Covid-19. Are landlords at an advantage if leases contain a “conclusive certification” clause?
These are standard clauses that usually provide that end of year service charge certificates are conclusive absent manifest error or mathematical error or fraud. In the case of Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd, Blacks argued that such clauses do not prevent tenants challenging the items falling within the service charges claimed.
On the facts of this case the judge agreed. He felt the certificate was only to be conclusive of “routine accounting matters”. The decision is not wholly surprising given that the relevant clause expressly stated that the certification was to be of the “amount” payable by the tenant (as is fairly standard) but, despite this, the landlord has leave to appeal.
It is well recognised that a landlord’s power to levy service charges and a tenant’s obligation to pay them are governed by the provisions in the parties’ lease. In Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd  EWHC 1263 (Ch) the High Court was asked to award summary judgment in favour of a landlord in respect of the non-payment of a service charge.