How frequently are service charges typically reviewed?

Service charges are typically reviewed annually because this frequency allows for a comprehensive assessment of costs, changes in service needs, and any fluctuations in operational expenses throughout the year. An annual review ensures that the charges reflect the actual costs incurred for providing services, maintenance, and any other financial obligations associated with the leasehold property. This process involves analyzing the previous year's expenditures and adjusting estimates for the upcoming year based on anticipated needs and inflation.

Additionally, reviewing service charges annually aligns with common practices in property management and lease agreements, which often stipulate yearly evaluations to maintain transparency and ensure that leaseholders are only paying for the services they receive. This regular review cycle helps build trust between tenants and property management, as it provides a structured system for financial accountability.

In contrast, reviewing charges monthly could lead to constant fluctuations that might confuse tenants, and biennial or seasonal evaluations may not capture dynamic shifts in costs or service delivery adequately.