RICS Professional Statement: service charges in commercial property
In September, the Royal Institution of Chartered Surveyors (“RICS”) published its latest Professional Statement, entitled “Service Charges in Commercial Property” (the “Statement”). The Statement re-states updates and replaces the existing Service Charge Code (the “Code”), and has the regulatory effect of formalising the Code within the RICS best practice framework. The Statement is effective from 1 April 2019 and will apply to all Service Charges across the UK.
The Statement sets out best practice in the management and administration of service charges in commercial property and provides mandatory obligations that RICS members and regulated firms engaged in this area must comply with or potentially face disciplinary proceedings.
The Statement is not capable of overriding the terms of a lease, however, service charge provisions must be read in conjunction with the Statement to help identify the best interpretation of the lease provisions, and ensure compliance with the Statement as far as possible.
The Statement has increased the regulatory weight of the Service Charge Code, and as such the mandatory requirements and core principles should be carefully considered by professional practitioners who advise on the terms of new commercial leases, or who are involved with service charge provisions in leases.
To read more on the Aims & Objectives, Mandatory requirements, Core Principals & Guidance Click here.