Service Charges in Commercial Property: The RICS Code of Practice
The Royal Intitution of Chartered Surveyors (RICS) Code of Practice was written in light of Government concerns about disputes over commercial service charges and their alleged lack of transparency.
The Code sets out the best practice for commercial service charges and has the status of a guidance note.
In addition to providing guidance of best practice for commercial service charges, the objectives of the Code are to:
- Remove service charges as an area of conflict.
- Deliver a budgetable and forecastable part of an occupiers’ overheads.
- Ensure that service charges are ‘not for profit, not for loss’ and that they are cash neutral to the owner’s income stream.
- Encourage transparency and communication in the relationship between landlords and tenants.
The Code recognises the lease as paramount and guides owners, occupiers and professional advisers to interpret leases as far as possible in line with the Code, and to modernise leases when opportunities arise, such as at lease renewals and when leases are varied.
We at Carter Jonas have considerable expertise in providing advice to landlords and tenants on the implications of the Code. This relates to the management of commercial properties and the interpretations of lease provisions during leases and at renewal together with review and reconciliation of service charge expenditure.
Partner - Head of Commercial Division
Scott specialises in providing advice on agency and development matters to a wide variety of clients from private individuals and trusts through to property funds, institutions, companies and statutor...