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Service fee code could be overhauled to help housing association tenants

Housing association tenants of long-term flats in England will be included in a revised service charge management code, under proposals seen by surveyors (Chris Radburn/PA) (PA Archive)

Housing association tenants of long-term flats in England will be brought under a revised service charge management code, as part of proposals seen by surveyors.

Originally developed in 1997, the code defines best practices for the management of buildings and residential leaseholds.

The code applies to residential leasehold property owners and managing agents and is used by the courts to settle disputes over service charges, as well as evidence from professionals.

But in the past, this only applied to leaseholders in private developments, the Royal Institution of Chartered Surveyors (Rics) said.

The proposed improvements to the code will also provide greater transparency on service fees and associated expenses, he added.

Proposed Code Enhancements Will Improve Industry Consistency and Transparency for Tenants Regarding Service Charges, Agent Fees, Long-Term Planned Preventive Maintenance Plans, and Reserve Funds

Anthony Parkinson, Rics

Rics said that with the rising costs associated with running apartment buildings, particularly where buildings need to be secured, there is a need for a clear code that helps guide landlords and agents. management on service fee funds, forward planning and tenant information.

The proposals would not prevent landlords from potentially raising fees, but they would require them to outline the rationale for setting service fees, Rics added.

Jeff Platt, technical author of the new service charge code, said: “Since the first edition of the code was published in 1997, housing associations and local authorities have become large-scale providers of leasehold housing, condominium and rental where the costs of services and property management are recovered in the form of variable rental charges.

“Tenants and tenants paying these charges should expect to receive similar best practice management standards from all landlords, managers and managing agents.”

There are around 4.6 million leasehold properties in England, according to Rics.

Antony Parkinson, Senior Property Standards Specialist at Rics, said: “The proposed improvements to the code will improve consistency within the industry and transparency for tenants regarding service charges, agent fees, long-term planned preventive maintenance plans and reserve funds.

“I encourage all tenants, landlords, registered providers, managing agents and anyone else affected by the code to participate in the consultation and provide feedback on the proposals.”

Consultation on the proposed new royalty code will close on May 15, 2022.

Rics said he will consider the feedback and the final service fee code will be released later this year.

A government spokesman said: ‘We welcome the efforts of the Royal Institute for Chartered Surveyors (Rics) and others to raise the professionalism and standards of management officers.

“Improving housing standards is a key objective of our upgrade program and these proposals will increase transparency for tenants and help guide landlords and managing agents on service charge funds.”