The Royal Institution of Chartered Surveyors (RICS) has published a new edition of its service charge residential management code. The fourth edition sets out an updated framework for the management of residential property in England where occupiers pay a variable service charge.
Approved by the Secretary of State under section 87 of the Leasehold Reform, Housing and Urban Development Act 1993, the code is designed to promote best practice across the sector and applies to landlords, managing agents, self-managed blocks, residents’ management companies, and right to manage companies involved in the management of relevant residential property. It also includes guidance for managing agents on terms of engagement and handling client money.
The updated code emphasises fairness, transparency and professionalism, and is intended to improve standards across budgeting, accounting, complaints handling, procurement, consultation, risk management and communication with leaseholders. It also reflects the growing importance of fire safety, health and safety compliance and the Building Safety Act 2022 in residential block management.
The code seeks to improve general standards, promote reasonableness and consistency in service charge management, reduce the causes of disputes and encourage sustainable, planned and cost-effective long-term maintenance with planned preventative maintenance, and reserve funding where leases allow.
The professional standard also underlines that landlords and managing agents must demonstrate competence, objectivity and transparency always. It calls for clear communication, timely documentation, and a value-for-money approach to service delivery.
The code acknowledges that the government is continuing to roll out leasehold reform, including through the Leasehold and Freehold Reform Act 2024, and notes that some provisions in the current edition will be superseded as further legislation comes into force. These include measures such as a proposed ban on insurance commissions forming part of service charges, a standardised service charge format, annual service charge reporting and new rights for leaseholders to request information.
Mairead Carroll, Senior Specialist (Property) at RICS, said: “This updated code will play a vital role in helping the residential property industry with consistency and application of best practice when handling service charge fees for their residents and leaseholders. RICS is grateful for all the contributions and engagement that went into making this possible.”
Antony Parkinson, head of residential block management, property and asset management at JLL, commented: “As the definitive reference guide for leasehold management professionals, I am delighted to see the publication of the new Service charge Code. This latest edition features an improved layout and structure alongside updated content that reflects developments in leasehold related law, regulation, and best practice for navigating this continually evolving sector.
Andrew V. Bulmer, CEO of The Property Institute, added: “The fourth edition of the code reflects a decade of significant change and evolution, and gives our profession the clear, practical framework needed to deliver transparency, fairness, and trust for leaseholders in the current landscape. By reinforcing mandatory principles and embedding best practice expectations, the code strengthens professionalism and integrity, and promotes fair, consistent service charge administration.”