Management Fees Disputes between Landlord and Tenant

Management fees are a common feature of both residential and commercial property arrangements, particularly where buildings are managed by a third party or include shared facilities. Despite this, disputes between landlords and tenants about management fees are frequent, often because expectations are not aligned, or the basis for the charges are not fully understood.

What are management fees in a landlord and tenant relationship?

Management fees are charges made to cover the cost of managing a property or development. They often relate to services such as coordinating repairs, maintaining shared areas, arranging insurance, or ensuring compliance with safety and regulatory requirements. In many cases, these fees are collected as part of a wider service charge, although they may also be listed separately depending on the structure of the lease or tenancy agreement.

Can a landlord charge management fees to a tenant?

Whether a landlord can charge management fees depends primarily on the wording of the lease or tenancy agreement. In commercial property, the lease will usually set out what costs can be recovered and how they are calculated. Residential arrangements may be subject to additional statutory controls, depending on the nature of the property and the agreement in place.

The key point is that the lease or agreement must state that management fees can be charged. Charges that fall outside what has been agreed are more likely to be challenged.

How management fees are set in commercial leases

In commercial leases, management fees are commonly linked to service charge provisions. These clauses usually explain what services are provided, how costs are apportioned between occupiers and whether there are any caps or exclusions.

Issues often arise where leases are unclear or where management arrangements change over time. Tenants may question whether fees reflect the services actually delivered.

Common causes of disputes over management fees

Disagreements about management fees tend to arise for practical reasons rather than deliberate misconduct. We find typical triggers include a lack of transparency around how fees are calculated, charges increasing without explanation, or tenants being asked to contribute towards services they do not benefit from.

In mixed use developments or properties with multiple occupiers, disputes can also arise about fairness and allocation, particularly where different tenants use shared facilities in different ways.

Are management fees different in residential and commercial property?

While the underlying principles are similar, residential and commercial properties are treated differently in law. Commercial tenants are generally bound by the terms of their lease, even if those terms later prove inconvenient. Residential tenants may have additional protections, particularly where fees are considered unreasonable or insufficiently explained.

Understanding which regime applies is important when assessing whether a charge is enforceable and how a dispute should be approached.

How disputes over management fees are usually resolved

Many disputes can be resolved by reviewing the lease and requesting supporting information to explain how fees have been calculated. Where an agreement cannot be reached, formal dispute resolution may be required. This might involve negotiation, mediation or, in some cases, court or tribunal proceedings. A proportionate approach is usually the most effective way to reach a practical outcome.

mlplaw advises both landlords and tenants on disputes involving management fees. Our Dispute Resolution and Commercial Property teams help clients understand their rights, review lease terms, assess whether charges are recoverable and resolve disagreements efficiently.

If you are facing uncertainty or disagreement over management fees, early advice can help clarify your position and prevent matters from becoming more complex than necessary. To discuss your situation, contact the Dispute Resolution team at mlplaw for guidance tailored to your circumstances.