RICS Service charges in commercial property 1st edition- RICS Service charge code
The RICS Service charges in commercial property 1st edition supersedes all three previous rics service charge codes which were published as guidance notes. This new document has the status of a Professional Statement.
RICS members and firms regulated by the RICS must comply with professional statements in order to remain professionally competent. When an allegation of negligence is made against a surveyor, the court is likely to take into account any relevant professional statements published by the RICS in deciding whether or not the surveyor acted reasonably.
The new RICS Service charges in commercial property 1st edition is aimed at improving standards, promoting best practice, uniformity, fairness and transparency in the management and administration of service charges in commercial property
One of the key points contained in the new 1st edition, is that owners and managers must ensure that a service charge apportionment matrix for their property is provided annually to all tenants.
Download a copy of the new RICS service charge code here . This link takes to you to the appropriate commercial property professional statement page so that you ensure that you have the most up to date version. Compliance is not only mandatory for professional members but it is also best practice and should be complied with if you want to present your firm ion the best light possible.
This new mandatory requirement took effect from 1st April 2019 and was not welcomed by certain landlords and managing agents. Other mandatory requirements contained in the RICS Service charges in commercial property 1st edition include but are not limited to :
1) Annual issuing of budgets and reconciliations with appropriate explanatory notes.
2) All expenditure that the owner and manager seek to recover must be in accordance with the terms of the lease.
3) Requirement for all s/charge monies (including reserve and sinking funds) to be held in separate or (or virtual) bank accounts.
4) Requirement for a signed statement of actual expenditure provided annually.
There is also additional guidance on transparency and disclosure, sinking, reserve funds, handovers and guidance on dealing with s/ charge queries and disputes.
Get in touch if you have any questions about the new rics service charge code and how it affects you. We can help landlords and managing agents get compliant with this new best practice initiative.