New RICS Guidance on Service Charges: What Revo Members Need to Know

RICS Publishes 2nd Edition of Service Charges in Commercial Property Standard

Published: 2 July 2025
By: Revo Property Management Committee

The Royal Institution of Chartered Surveyors (RICS) has released the 2nd edition of the UK Professional Standard: Service Charges in Commercial Property. Published on 25 June 2025, the updated guidance will come into effect on 31 December 2025.

Driven by an evolving industry, where service charges are becoming a higher proportion of total occupancy costs in the retail and leisure sector, the RICS have consulted with a wide range of industry experts, its own members, and a public consultation, to update their existing publication. The new edition aims to promote best practice and improve general standards by focusing on uniformity, transparency, fairness, and efficiency in service charge management.

What’s New in the 2nd Edition?

Timeliness: Clearer expectations around the issuing of budgets and reconciliations.
Dispute Resolution: New guidance on withheld monies, non-compliance reporting, and complaints.
Transparency: Requirement for an apportionment matrix detailing full calculations and methodology.
Income Disclosure: Mandated disclosure of commissions and income from group insurance contracts.
Sustainability: A dedicated ESG section, including guidance on recovering costs for environmental improvements.
Building Safety: Reference to the Building Safety Act 2022, with clarification that costs related to certain defects are non-recoverable.
Accounting Standards: Enhanced guidance on accruals, reserve fund management, and audit requirements in line with ISA 800 (UK).
Operational Guidance: Best practice for property handovers and lease negotiations.
Updated Templates: Revised accounting sample reports included in the appendix.

Why It Matters

This Professional Standard now represents the minimum acceptable level of performance for RICS members. Any deviations from its mandatory or core provisions must be disclosed to both clients and occupiers – subject to lease terms.