Landlords of residential properties should be aware that a clause which provides that service charge apportionments are to be determined by the Landlord's surveyor is rendered void (whether or not expressed to be final and binding) by S.27A(6) of the Landlord and Tenant Act 1985.

This is the case even where there is an intermediate landlord between the residential tenants and the ultimate freeholder resulting in a scenario whereby the residential tenants are entitled to challenge the apportionment of relevant costs in a head lease notwithstanding the fact that they are not parties to the head lease.

To avoid potential disputes over service charge apportionments landlords granting residential leases should specify the proportion for which each residential tenant will be liable. This is only relevant in residential leases and does not apply to commercial leases. This does however pose a problem for landlords of mixed use schemes who may have to consider separate service charge schedules for the residential and commercial elements.