The second edition of the RICS Code of Practice for Service Charges in Commercial Property will come into effect on 1 October 2011. As with the first edition, it has the status of a guidance note and represents best practice. Its use is not mandatory but its contents may be taken into account in determining whether a practitioner has acted negligently. This guide summarises the main provisions of the code and uses practical examples to illustrate how it may be applied in practice.

The Core Principles

The code comprises a list of core principles supported by detailed guidance setting out recommended best practice. The core principles may be summarised as follows:

Service costs

Services should be procured on a value for money basis using competitive quotations or cost benchmarking; Owners should not profit from the provision of services; and,Costs are to be transparent so all parties know how they are made up and management fees should be on a fixed price basis.