Management fees on commercial property
Question from Angus updated on 27th February 2007:
I own a commercial property that is leased out to 4 different tenants. Can I charge them a management fee on top of the agreed terms of the lease for the time I spend managing the property? I was thinking I would set up a Ltd company as the management company.
Our expert responded:
It all depends on your lease agreement, and generally the answer would be no. The time you spend managing your property is part of your cost of looking after and maintaining your asset. Depending on how the ownership of your commercial property has been set up, you may be able to charge a management fee for your time. However, there are a few tax issues to be considered, and you should take advice from your accountant in relation to your specific circumstances.
Kenina Court is a director of Acorn Solutions Limited, an accounting firm dedicated to working with clients to help them create wealth. She is an avid property investor, entrepreneur and seminar presenter on asset protection and wealth strategies.
