What are fixed service charges in leasehold management?

Fixed service charges in leasehold management refer to pre-determined fees that are established upfront and do not change from year to year without substantial justification. This structure provides predictability for both the landlord and tenants, allowing them to budget more effectively. Unlike variable charges that fluctuate based on usage or other factors, fixed service charges offer stability and transparency in the costs associated with maintaining and servicing the leasehold property.

This approach helps in minimizing disputes and misunderstandings regarding fees, as tenants know in advance what they will be responsible for financially. It serves to simplify financial planning for leaseholders by ensuring consistency in expected service charges.