Service Charge Code: Consultation update
CALL TO ACTION
Link to the new version of the RICS Code of Practice for Service Charges in Commercial Property.
The document will become a Professional Statement that requires certain items to be Mandatory, and in my opinion (and those of many of those active within Service Charges), the current version does not go far enough in not being very specific in what should be Mandatory and what remains advisory as â€śbest practiceâ€ť and therefore fails to deliver the step change that could result in improved standards of accounting and accountability.
Specifically there needs to be dates with reference to the issuance of budgets, one month prior to start of relevant period previously accepted as best practice is now shown as â€świll be issued annuallyâ€ť, similarly the reconciliations â€“ 4 months after close of period was previously accepted best practice has the same â€świll be issued annuallyâ€ť BOTH of which are a step back and most agents will do the barest minimum to be able to claim Code Compliance.
The need for an Apportionment Schedule to be provided needs to be expanded (it was and then watered back down) so that needs reinstating to show full working as to how the actual apportionment has been calculated.
Marketing needs to revert back to Mandatory 50/50 â€“ the new version has it as a â€śshared expenseâ€ť â€“ a Landlord putting in 10% is not sharing adequately but would be Code compliant so the 50/50 needs to be mandatory.
The regulatory board of the RICS is largely responsible for these as they claim that these requirements are too difficult to regulate for? Just because it is going to be difficult should not mean we as an Industry should shy away from a step change that will undoubtedly drive standards and reduce disputes. Given a valid defence is â€śthe lease doesnâ€™t say I have toâ€ť against all of these I cannot see what the problem is personally.
Could everyone who gets this email PLEASE sign on and complete the consultation WITH full and frank comments around the lack of detail to the Mandatory items leaving them next to useless â€“ IF enough of you complete the consultation piece, AND comment in similar fashion, then the Working Party will have to sit up and take notice AND amend the document prior to its issue.
IF we cannot get the document amended, and insist that the Mandatory items are sufficiently robust as to deliver some improvement of standards I can see no point in the issuance of the document at all, and will be recommending to the Executive Committee of the PMA to withhold its endorsement of the finished article thereby removing its Industry status.
Thanks for your time, now PLEASE do the consultation â€“ you have 6 short weeks but do it now to make sure it is done.
IF you need any assistance / help feel free to get in touch directly.
John Gray Service Charges Ltd
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