Reflecting on three decades of service charge reform

When I first became involved with service charge reform in 1996, few of us could have predicted that a modest Guide to Good Practice would evolve into the Service charges in commercial property code.

Over three decades, I have had the privilege of helping shape this journey – from the early industry guides through to my role as technical author of various iterations of the code.

What began as voluntary guidance has matured into a binding professional framework that underpins fairness, accountability and trust in the management of commercial property services.

It emerged largely in response to pressure from retail tenants – particularly in shopping centres – who wanted to see greater fairness and consistency in the way services were managed and costs recovered.

The guide was neither binding nor mandatory. Adoption was entirely voluntary, but it aimed to provide a framework to reduce disputes, improve consistency and promote good administrative practice in what had long been a contentious area.

At the time, service charges were widely regarded by both landlords and tenants as a source of tension and were often considered as being opaque, unpredictable and difficult for occupiers to challenge due to a lack of detail and transparency in the service charge accounts. It was not unusual for statements of actual expenditure to be issued many years after the actual year end.

Even in this modest form, the guide was a milestone. For the first time, there was an agreed reference point for what good practice in service charge administration might look like – a sign that the surveying sector was beginning to take seriously the concerns of occupiers and the benefits of transparency.

I was fortunate to contribute comments to that first edition and it quickly became clear that it was the start of a longer journey.

It offered more detailed guidance on such matters as achieving value for money, timely communication with regard to the provision, cost and quality of services, management fees and timescales for the issue of budgets and statements of actual expenditure.

The revised edition also made clear that the principles were to be applied across the full spectrum of commercial assets, including offices, industrial estates and retail.

Still voluntary, the guide nonetheless reinforced the message that service charge transparency was a universal expectation, not just a retail concern.

For the first time, service charge practice was no longer simply an industry consensus, but was instead explicitly framed as a matter of professional responsibility.

The code built on the previous guides but gave them a clear professional anchor having been given the status of a formal RICS guidance note, embodying industry best practice.

It established clear standards of performance for managers of service charges against which behaviour could be judged and advice given.

By the second and third editions in 2011 and 2014, the code was being widely cited in disputes, negotiations and day-to-day management.

Key features of the code included:

• reasonable, transparent and justifiable service charges
• clarity about which costs could be recovered and which remained the landlord's responsibility
• encouragement of best practice in budgeting, reporting and certification.

This was when the code's influence became most visible – steadily shifting the culture of how service charges were managed and understood.

For the first time, compliance was mandatory for RICS members and regulated firms. The standard introduced both mandatory requirements and core principles of best practice, creating a clear baseline across the industry.

Mandatory provisions on budgeting, reconciliations and transparency over the apportionment of service charges could no longer be ignored. Occupiers gained reassurance, while landlords and managers now had a clear framework to follow.

These changes were not without their challenges. Some practitioners initially resisted the shift, fearing that mandatory obligations would be burdensome. However, many of the principles were already widely accepted, and codifying them simply levelled the playing field.

The second edition of the professional standard, published in June 2025, builds on this foundation.

It refines and updates the principles established in previous iterations to reflect emerging industry priorities, including environmental, social and governance (ESG) for mixed-use schemes, estate charges and provision for anticipated future expenditure.

The new edition demonstrates that service charge best practice is not static but continues to adapt to the evolving needs of the market.

For me, this progression – from voluntary guidance in 1996 through to today's second edition of RICS' professional standard – marks the culmination of decades of reform. Service charge management is now firmly embedded as a professional obligation, not just guidance.

It has allowed me to engage not only with the technicalities of leases and budgets, but also with the deeper question of what it means to be a professional.

At its heart, service charge reform has always been about trust – trust between landlord and occupier, trust between manager and client, and trust in the integrity of our profession.

As I head towards retirement, I take great pride in what has been achieved and look forward to passing the baton to others to continue evolving best practice.

I firmly believe this work is in good hands, and that the principles of fairness, transparency and accountability will continue to guide the profession as new challenges emerge.