The RICS has published a second edition of its Property Standard covering service charges in commercial property, which will come into effect from 31 December 2025.  Compliance is mandatory for all RICS members and RICS regulated firms and is aimed at promoting best practice in the management and administration of service charges.

The revised mandatory obligations include the following: 

1. Budgets must be issued at least one month prior to the start of the service charge year and year end certificates within four months of the end of the service charge year; 
2. Tenants must be advised that they are not generally entitled to withhold payment of service charges that have been properly demanded (but withholding a payment of any difference arising from a mathematical error may not be considered unreasonable); and 
3. Landlords must ensure that, following resolution of a dispute, any service charge that has been raised incorrectly should be adjusted to correct the error without delay. 

The second and third of these are expressly aimed at reducing the causes of disputes. There is further guidance on the resolution of disputes if they arise with parties encouraged to use alternative dispute resolution (ADR). All of these are in keeping with recent case law and judicial guidance.  

Landlords, tenants and their solicitors are also encouraged to ensure that the lease they sign reflects the professional standard with terms to be relevant and appropriate given the lease term and the sale and type of property concerned.   

A link to the new standard can be found here: https://www.rics.org/content/dam/ricsglobal/documents/standards/Service-Charges-in-Commercial-Property-2nd-edition.pdf