Knowing which rules apply to a commercial lease can be difficult for both landlords and tenants. Similarly, they may experience confusion when it comes to the rules surrounding a service charge on commercial property. The Royal Institute of Chartered Surveyors (RICS) Code of Practice for Service Charges is the leading code on service charges for commercial property in the UK. RICS encourages and ensures the highest standards and qualifications are observed in construction works and land developments. RICS standards are recognised globally. This article will explain the RICS Code of Practice for Service Charges in the UK.<\/p>\n\n\n\n
A commercial lease agreement may have a service charge<\/a> provision. Commercial tenants typically share the commercial property they have leased with other businesses. Landlords spend money to maintain and run these shared parts of the commercial property. Commercial tenants will pay their landlord a service charge, as their lease agreement prescribes, to cover these costs.<\/p>\n\n\n\n Service charge amounts vary depending on the calculation method. Fixed service charges mean the tenant will only pay a pre-agreed specific percentage of the cost the landlord incurs. On the other hand, proportional service charges are calculated based on how much space the commercial tenant occupies within the commercial property.<\/p>\n\n\n\n Service charges often are the source of disagreements between commercial landlords<\/a> and commercial tenants. Poor communication between the commercial landlord and the commercial tenant is often to blame. Accordingly, commercial landlords should consult the RICS Code as it provides valuable recommendations regarding service charges. Further to this, landlords should take the opportunity when a lease is due for renewal to make the appropriate changes to the lease agreement to ensure it is compliant with the RICS code.<\/p>\n\n\n\n Professional bodies consider the RICS Code to reflect best practices. Courts, in professional negligence cases where the landlord is the subject, will consider if they followed any guidance provided by the RICS Code. Commercial landlords, as such, have an incentive to ensure their lease agreements comply with the RICS Code. Service charge provisions that are not compliant with the RICS Code will even be read and understood in line with the Code. Commercial leases that have a legal requirement which states otherwise will likely be exempt. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nRICS Code <\/h2>\n\n\n\n