service-charge-check

---
name: service-charge-check
description: Checks the service charge you are being billed for against the lease that creates the liability and the RICS professional standard that governs how it should be run: every cost head tested against the lease, the apportionment matrix demanded and checked, the budget and year end deadlines tested against the dates you actually received them, the excluded costs hunted for by name, and a dated written query that a managing agent has to answer. Use when a service charge demand arrives, when the year end accounts are late, or when the charge has moved more than the rest of your costs.
---

# Every pound of your service charge traced to a clause in your lease and a cost the landlord actually incurred

You give this the lease service charge provisions, the budget, the year end accounts, the apportionment matrix if you were given one, and the dates you received each document. You get back a cost head by cost head test against the lease, a list of every item that appears on the excluded list in the RICS professional standard with a note on whether it is being charged to you, the apportionment worked through with the basis stated, the timing record measured against the mandatory deadlines, and a dated written query ready for your name. It will not tell you to withhold payment, because in most cases you are not entitled to, and an owner who stops paying a properly demanded service charge turns an argument about four hundred pounds into a forfeiture risk.

## What it does

1. **Start from the lease, because the RICS standard does not create the liability and cannot override the lease.** The professional standard is explicit that the lease is the governing document and that its mandatory requirement one is "All expenditure that the landlord and manager seek to recover must be in accordance with the terms of the lease". So the first pass is the lease alone: copy the service charge covenant verbatim, list the services the landlord is obliged or entitled to provide, list the costs the lease permits to be recovered, record the apportionment method the lease specifies, record the service charge year, and record any cap, any exclusion and any sweeper clause. Everything that follows is measured against that list.

2. **Lay the budget and the year end accounts alongside the lease list, one cost head at a time.** Build a table with one row per cost head as it appears on the demand, the amount budgeted, the amount actually spent, the clause in the lease that permits it and a verdict of permitted, not permitted or not clear from the lease. Do not net anything off and do not group heads that the landlord has grouped, because a single line reading "site costs" can hide four different arguments. The standard's appendix A sets out standard industry cost classifications for exactly this reason, and a demand that does not follow a recognisable classification is itself worth a question.

3. **Test the two mandatory timing deadlines against the dates you actually received the documents, not the dates printed on them.** Mandatory requirement three of the professional standard requires managers to issue to tenants "budgets, including an explanatory commentary at least one month prior to the start of the service charge year" and "an approved set of service charge year end accounts showing a true and accurate record of the actual expenditure constituting the service charge within four months of the service charge year end". Where those timescales cannot be met, "a timely explanation must be provided of when they will be issued and the reason for the delay", and the standard is clear that this "does not dispense with the obligation to provide both". Record the service charge year end, add four months, and put the date you received the accounts next to it. A late reconciliation is the commonest symptom of a service charge nobody is managing.

4. **Demand the apportionment matrix by name, because it is mandatory and it is the document that makes a charge checkable.** Mandatory requirement four states that managers "must ensure that a service charge apportionment matrix, which clearly shows the detailed basis of calculation and the total apportionment per schedule for each unit, is provided with the budget and service charge account to all tenants". Record whether you were given one. If you were, check that your percentage is stated, that the basis of calculation is stated, that the percentages across all units total one hundred per cent for each schedule, and that your percentage matches the lease or, where the lease sets a fair proportion, that the basis is explained. If you were not given one, that is the single most useful thing to ask for, and it is a mandatory requirement rather than a favour.

5. **Hunt the excluded costs by name, because they are listed and they turn up.** Core principle 3.8 of the standard lists costs that should not be included in a service charge. They are any initial costs incurred in relation to the original design and construction of the fabric, plant or equipment; any setting up costs including fitting out and equipping the on site management offices; "any improvement costs above the costs of normal maintenance, repair or replacement"; future redevelopment costs; costs and fees relating to the landlord's investment interest, which the standard spells out as including asset management and rent collection, the cost of letting units, and matters between the landlord and an individual tenant such as enforcing covenants, dealing with consents for assignments, sublettings, alterations, rent reviews and additional opening hours; "costs attributable to void premises and the landlord's own use of the property"; and "any costs arising out of the negligence of the manager or landlord". Go through that list item by item against the demand. Void costs and letting costs are the two that most often appear in a half empty parade.

6. **Check the management fee and the no profit principle, which are stated as separate things and are both mandatory in substance.** Core principle 3.1 states that "Management fees should be set out as a fixed cost with no additional fee elements in other cost headings" and that "Landlords should not profit from the provision or supply of services", the recoverable amount being "limited only to the proper and actual cost incurred in the provision or supply of services" save for a reasonable commercial management fee. Mandatory requirement two puts it as a number: managers "must seek to recover no more than 100% of the proper and actual costs of the provision or supply of the services". So a percentage based management fee that rises with expenditure, or a fee that also appears inside other cost heads, is worth a question in writing.

7. **Check where the money is held and what happened to the interest, because both are mandatory.** Mandatory requirement five requires service charge monies including reserve and sinking funds to "be held in one or more discrete (or virtual) bank accounts". Mandatory requirement six requires that interest earned on service charge accounts, or a proper and reasonable amount of interest at normal commercial rates where separate accounts per property are not operated, "must be credited to the service charge account after appropriate deductions (e.g. bank charges) have been made". If you contribute to a reserve fund, ask both questions every year and record the answers, because a reserve fund is your money held for years and the interest on it is not the landlord's.

8. **Write the query as a dated letter with numbered questions and a reasonable reply date, and keep paying meanwhile.** Mandatory requirement seven of the standard records the position practitioners must give tenants: "tenants are not generally entitled to withhold payment of service charges that have been properly demanded", with the narrow qualification that withholding "any difference arising from mathematical or computational error may not be considered unreasonable". Mandatory requirement eight requires that where a dispute is resolved, a service charge raised incorrectly "should be adjusted to correct the error without delay". So the correct move is to pay, query in writing and keep the correspondence. Number the questions, attach the cost head table, ask for the apportionment matrix by its proper name, and give a date for a reply.

9. **Hand the structured facts to Codex and let it build the files.** Run:

   ```
   codex exec --sandbox danger-full-access --skip-git-repo-check -C "<working folder>" - < CODEX.md
   ```

   Claude hands over the lease provisions verbatim, the cost heads with budget and actual figures, the dates every document was issued and received, the apportionment percentages and their basis, and the owner's own answers on what was and was not supplied. Codex returns the cost head test, the exclusions checklist, the apportionment check, the timing record, the query letter facts and a gaps register. Codex writes no customer facing prose and reaches no conclusion about reasonableness.

10. **Escalate on the route the lease gives you, and only after the written query has been answered or ignored.** Record what the lease says about disputes. Core principle 3.7 of the standard records the profession's position that leases including renewals "should make provision for either party to require the resolution of disagreements through alternative dispute resolution (ADR) as a cost-effective alternative to court action", and that where the parties cannot agree a mediator or an independent expert, "the President of RICS should (on request) nominate a suitable person". It also notes that where leases do not provide for ADR, "there is nothing to stop them agreeing to use ADR to resolve a dispute". Record the route, the cost and who bears it. A four hundred pound query is not worth an expert determination, and knowing that before you start is part of the answer.

## Then it checks

1. Every cost head on the demand has a row naming the lease clause that permits it, or is marked as not clear from the lease and listed as a query.
2. The file records the service charge year end, the date four months after it, and the date the year end accounts were actually received, or states plainly that they have not been received.
3. The file records the date the budget was received and the date one month before the start of the service charge year, and states whether the budget arrived before that date.
4. The file states whether an apportionment matrix was supplied, and where it was, whether the percentages for each schedule total one hundred per cent.
5. Each of the seven excluded cost categories in core principle 3.8 appears in the exclusions checklist with a finding of present on the demand, not present, or cannot be told from the information supplied.
6. No file advises withholding payment, and the query letter facts record the reply date requested and the date the letter was written.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is.
- This skill covers England, Wales and the rest of the UK only to the extent the RICS professional standard states its own application, which is the UK and Crown Dependencies, and the lease is the governing document in every case. Where the premises are in Scotland or Northern Ireland, the lease analysis and the remedies differ and the England and Wales landlord and tenant statutes cited elsewhere in this pack do not apply. Say which jurisdiction the premises sit in on the first page of the output and refuse to apply English landlord and tenant law to a Scottish lease.
- Never advise withholding payment of a properly demanded service charge. The professional standard records that tenants are not generally entitled to do so, and an owner who withholds turns a billing query into a breach of covenant with forfeiture at the end of it.
- Never state a service charge per square foot benchmark, a typical percentage of rent, or any other figure for what a service charge should cost a single independent UK venue. No published figure exists, the numbers quoted in the market describe shopping centres and office towers, and an owner arguing from one has swapped a checkable question about a cost head for an unwinnable argument about averages.
- Never treat the RICS professional standard as overriding the lease. It sets mandatory requirements for RICS members and RICS regulated firms and it is a powerful lever where the manager is one, and it does not rewrite a lease that permits a cost.
- Never accept a grouped cost head as a single item. Ask for the constituent costs by name, because a group is where a non recoverable cost hides.
- Never let a year pass without asking for the apportionment matrix. It is mandatory, it is the only document that shows how your percentage was reached, and the absence of it for three years makes a historic query very hard to run.
- This output is a working document prepared for the owner's own solicitor, chartered surveyor and accountant to check. It compares a demand with a lease and with a published professional standard. It is not legal advice, it is not an audit of the landlord's accounts and it is not a finding that any charge is or is not recoverable.

## Built from
- RICS, "Service charges in commercial property", RICS professional standard, UK, 2nd edition, June 2025, effective from 31 December 2025, https://www.rics.org/content/dam/ricsglobal/documents/standards/Service-Charges-in-Commercial-Property-2nd-edition.pdf, read 23 September 2026: mandatory requirements one to eight in steps 1, 3, 4, 6, 7 and 8, core principle 3.1 in step 6, core principle 3.7 in step 10 and core principle 3.8 in step 5.
- RICS, "Service charges in commercial property" standard page, https://www.rics.org/profession-standards/rics-standards-and-guidance/sector-standards/real-estate-standards/service-charges-in-commercial-property, read 23 September 2026: the edition, the publication date of 25 June 2025 and the effective date of 31 December 2025 used to date the standard in step 1.
- RICS, "Code for leasing business premises", RICS professional standard, England and Wales, 1st edition, February 2020, effective from 1 September 2020, https://www.rics.org/content/dam/ricsglobal/documents/standards/February_2020_Code_For_Leasing_Business_Premises_England_And_Wales_1st_Edition.pdf, read 23 September 2026: Part 3 paragraph 5.1 on disclosure of estimates and irregular events and paragraph 5.2 on conformity with the service charges standard, used in step 2.
- Landlord and Tenant Act 1954, section 30, https://www.legislation.gov.uk/ukpga/1954/56/section/30, read 23 September 2026: ground (b), persistent delay in paying rent which has become due, and ground (c), other substantial breaches, which are the reason the no withholding rule is written as a rule rather than as advice.

# service-charge-check

## You are given
The service charge documents for one commercial letting of premises held by a UK independent hospitality business, together with the country the premises sit in as confirmed by the owner. The lease service charge provisions verbatim with their clause numbers, including the list of services, the list of recoverable costs, the apportionment method, the service charge year, any cap, any express exclusion and any sweeper clause. The budget for the service charge year in question, cost head by cost head, with the amount budgeted for each and the explanatory commentary if one was supplied. The year end accounts for the same or the preceding year, cost head by cost head, with the actual expenditure for each. The apportionment matrix if one was supplied, with the percentage for every unit in every schedule. The dates: the start and end of the service charge year, the date the budget was issued, the date the owner received it, the date the year end accounts were issued, the date the owner received them, and the date of any explanation of delay. The owner's answers on whether service charge monies are held in a discrete account, whether interest has been credited, whether a reserve or sinking fund exists and what the owner has contributed to it. The dispute resolution provisions in the lease verbatim. The name of the manager or managing agent and whether the owner knows them to be an RICS member or RICS regulated firm. Every judgement call, including whether to dispute, whether to instruct a surveyor and what to accept, has already been made by the owner and is supplied to you.

## Produce
Write into a `./service-charge-check-output/` folder:

1. `cost-head-test.csv` with these columns in this order: `head_ref`, `cost_head_as_billed_verbatim`, `schedule`, `budget_gbp`, `actual_gbp`, `variance_gbp`, `variance_percent`, `lease_clause_permitting`, `lease_wording_verbatim`, `verdict`, `is_grouped_head`. `head_ref` is S001 upward. `verdict` is exactly one of `permitted by a named clause`, `not permitted by any clause supplied`, `cannot be told from the lease supplied`. `is_grouped_head` is `yes` or `no`. Every row with `verdict` other than `permitted by a named clause`, and every row with `is_grouped_head` reading `yes`, is listed in `query-letter-facts.md` as a numbered question and in `gaps.md`.
2. `exclusions-checklist.csv` with columns: `exclusion_ref`, `excluded_cost_category_verbatim`, `present_on_demand`, `cost_head_ref_where_present`, `amount_gbp`, `evidence`. One row for each of the seven categories in core principle 3.8 of the RICS professional standard, copied verbatim in the order the standard lists them. `present_on_demand` is exactly one of `present`, `not present`, `cannot be told from the information supplied`. No category is omitted, even where nothing was found.
3. `apportionment-check.md` recording, on separate lines and nothing else: whether an apportionment matrix was supplied, stated as `supplied` or `not supplied`; the apportionment method the lease specifies, verbatim; the percentage applied to this unit in each schedule; the total of all units' percentages in each schedule; whether each total equals 100 per cent, stated as `equals 100 per cent`, `does not equal 100 per cent` or `cannot be told from the information supplied`; whether the percentage applied matches the lease, stated as `matches`, `does not match`, `lease specifies a fair proportion, basis stated` or `lease specifies a fair proportion, basis not stated`; and the amount by which this unit's charge would change for each one per cent of apportionment, computed from the total expenditure supplied.
4. `timing-record.md` recording, on separate lines and nothing else: the service charge year start and end; the date one month before the year start; the date the budget was issued; the date the owner received the budget; whether the budget was issued at least one month before the year start, stated as `yes`, `no` or `cannot be told`; the date four months after the year end; the date the year end accounts were issued; the date the owner received them; whether they were issued within four months of the year end, stated as `yes`, `no` or `not yet received`; and whether an explanation of any delay was supplied with its date. Every line names the source of the date.
5. `money-handling.md` recording, on separate lines and nothing else: the owner's answer on whether service charge monies are held in one or more discrete or virtual bank accounts; the owner's answer on whether interest has been credited to the service charge account; whether a reserve or sinking fund exists; the owner's total recorded contribution to it with the years it covers; the management fee as billed with its amount and whether it is stated as a fixed cost or as a percentage; and whether any fee element appears inside another cost head, naming the head. Each line names its source.
6. `query-letter-facts.csv` with columns: `question_ref`, `question_text`, `cost_head_ref`, `amount_in_question_gbp`, `standard_or_clause_relied_on`, `document_requested`, `reply_date_requested`. `question_text` is composed only from the wording Claude supplies and is never invented by you. `document_requested` is exactly one of `apportionment matrix`, `constituent costs of a grouped head`, `invoices for a named cost`, `explanation of delay`, `bank account confirmation`, `interest credited confirmation`, `management fee basis`, `none`.
7. `dispute-route.md` recording, on separate lines and nothing else: the dispute resolution clause number and its wording verbatim; the route it names, stated as `arbitration`, `independent expert`, `mediation`, `court`, `not stated in the lease supplied`; who may start it; who appoints where the parties cannot agree; who bears the cost as the lease states it; and the total amount currently in question from `query-letter-facts.csv`.
8. `gaps.md` a numbered list of: every cost head with no permitting clause; every grouped cost head; every exclusion category that could not be tested; the absence of an apportionment matrix; any schedule whose percentages do not total 100 per cent; every timing test that could not be run for want of a date; every money handling question the owner could not answer; and any figure supplied without a document.

## Rules
- Codex tests, tabulates, counts and dates. It never decides whether a cost is reasonable, never decides whether a charge is recoverable as a matter of law, never advises withholding payment, never writes the letter itself and never estimates a missing figure.
- Never net a credit against a cost head. Credits are recorded as their own rows so that the gross expenditure stays visible.
- Never split, merge or rename a cost head as billed. The verbatim column carries the landlord's own wording, and a grouped head is flagged rather than unpicked by you.
- Never write into any file a service charge per square foot figure, a typical percentage of rent, or any benchmark for what a service charge should cost a single independent UK venue. No such published figure exists and none is to be recorded.
- Never record a finding that the RICS professional standard overrides the lease. Where a cost is permitted by the lease and discouraged by the standard, both facts are recorded in their own columns and no conclusion is drawn.
- Never produce a file that recommends withholding payment, in any wording, including conditional wording.
- Never apply an England and Wales landlord and tenant statute to premises outside England and Wales. Record the country on the first line of every file. Where it is Scotland or Northern Ireland, the cost head test, the exclusions checklist, the apportionment check and the timing record may still be produced against the lease and the professional standard, and `dispute-route.md` records only what the lease says, with a line stating that the statutory analysis in the rest of this pack does not apply.
- Use British English, GBP written as `GBP` or the pound sign, and DD Month YYYY dates. No em dash characters in any file you write, and any supplied text containing one is recorded verbatim and flagged in `gaps.md`.
- Every lease clause, cost head, standard quotation and figure is copied exactly as supplied, including a spelling that looks wrong, which is itself recorded in `gaps.md`.
- Every file ends with this line: this is a working document prepared for the owner's own solicitor, chartered surveyor and accountant to check before any charge is disputed or withheld. It is not legal advice, it is not an audit and it is not a finding that any charge is or is not recoverable.

## Return
The absolute path of every file written, the row count of each CSV, the total budgeted and the total actual expenditure, the count of cost heads by verdict, the total amount sitting in rows not permitted by a named clause, the list of exclusion categories recorded as present with their amounts, the apportionment percentage applied to this unit and whether each schedule totals 100 per cent, the two timing answers from `timing-record.md` stated in full with the dates they rest on, the management fee amount and basis, the number of questions in `query-letter-facts.csv` with the total amount in question, the route recorded in `dispute-route.md`, a one line confirmation that no file recommends withholding payment, and the `gaps.md` item count.