The second edition of the RICS Code of Practice for Service Charges in Commercial Property becomes effective from 1st October 2011. It builds on the first edition of the code and is aimed at reducing conflict between owners and occupiers.
As with the first edition, the code has the status of a guidance note and is intended to embody “best practice”. There will be circumstances when it is not appropriate to follow the code, but there should be a good reason. The RICS say that a practitioner is unlikely to be found to be negligent if he adheres to the code when dealing with commercial property service charges.
The code is now set out more clearly than before with core principles set out at the start followed by guidance and supporting information.
Key elements include guidance on:-
- Administration (value for money basis, the quality of services appropriate to the location, guidance on management fee and profit, transparency of costs).
- Communication and consultation.
- Financial controls and competencies (duty of care and certifying accounts, financial competence and accounting policies).
- Dispute resolution procedures.
- Guidance on mixed use of properties where the residential service charge code may also apply.
A copy of the code can be downloaded on the RICS website.
If you have a commercial property and would like to discuss service charge codes please contact Simon Patrick on 01234 362921 or via e-mail: srp@robinsonandhall.co.uk