Last month, the Royal Institution of Chartered Surveyors (RICS) introduced the fourth edition of its Service Charge Residential Management Code, effective from 7 April 2026. This is the first major update in a decade, reflecting the sector’s significant evolution.
With around 4.6 million leasehold homes in England, the way service charges are managed plays a central role in the day-to-day experience of homeowners. While the code itself is not legislation, it carries considerable weight and is often used by courts and tribunals to assess whether costs and management practices are reasonable and fair.
For leaseholders, managers and housebuilders, the updated code is designed to improve transparency and consistency across the entire sector.
What is the RICS Service Charge Code?
The RICS Service Charge Residential Management Code sets out best practice for managing service charges in residential buildings. It provides a clear framework for managing agents, covering everything from budgeting and accounting to communication and complaint handling.
Although it is not legally binding, it is widely recognised as the benchmark for professional standards in residential management across the industry. With this, it plays an important role in shaping how developments are managed in practice.
Why has it been updated?
The latest update reflects a combination of industry change and increasing expectations. In recent years, there has been greater scrutiny of service charges, alongside wider legislative reform, particularly in relation to building safety.
The updated code aligns with these changes and reinforces the need for a more transparent and accountable approach to residential management. It also aims to reduce the likelihood of disputes, which have historically been one of the most common challenges in leasehold properties.
At the same time, it signals the direction of travel for the sector, with further leasehold reform expected to place even greater emphasis on clarity and standardisation in the near future.
What has changed?
A key update is the stronger emphasis on transparency and clearer communication. Managing agents are expected to provide detailed explanations of how service charges are calculated and spent, through structured budgeting and accessible reporting. The code also recognises the importance of keeping residents informed, particularly about costs and related decisions, which is vital in owner-occupied developments.
Another key focus is on greater communication. The code highlights the importance of keeping residents informed, particularly regarding costs and the decisions behind them. This is particularly relevant in owner-occupied developments, where residents often take an active interest in how their building or estate is run.
The updated code also reflects the growing importance of building safety. It recognises the increased responsibilities placed on those managing residential developments and the need for processes that support compliance and accountability.
Finally, there is a renewed focus on professionalism, fairness and consistency. Managing agents are expected to operate with a high level of competence and integrity, while service charges should be reasonable, proportionate and clearly justified.
What does this mean for property managers?
For managing agents, the updated code raises expectations and encourages a more proactive, resident-focused approach. This includes clearer budgeting and stronger communication with residents. It also means ensuring that decisions are well documented and can be clearly explained if challenged.
For organisations like Placekeeper, many of these principles are already embedded in our day-to-day approach. The updated code simply provides further structure and reinforces the importance of maintaining high standards across service delivery.
What does this mean for leaseholders?
For leaseholders, the changes should lead to greater visibility and understanding of service charges. Clearer communication and more transparent reporting mean residents are better informed about how their money is being used. This can help build trust and reduce the potential for disputes.
In developments where many residents are owner-occupiers, this is particularly important. Effective management not only supports compliance but also contributes to the overall quality and reputation of a community, ensuring the assets can hold long-term value.
What does this mean for housebuilders and developers?
For housebuilders and residential developers, the updated code offers greater clarity around what good management looks like in practice.
It highlights the importance of engaging with managing agents much earlier in the development lifecycle. Too often, management considerations are introduced post-completion, when key decisions around design and long-term maintenance have already been made.
By involving a managing agent during the planning and construction phases, developers can ensure that schemes are set up for efficient management from day one. This includes shaping service charge budgets, selecting appropriate materials and designing with long-term maintenance in mind.
A step forward for residential management
While the updated RICS code does not introduce new legal requirements, its influence should not be underestimated. It reflects a clear shift towards greater transparency and accountability across the sector.
By setting clearer expectations and promoting better communication, it provides a stronger foundation for how residential communities are managed, both now and in the future. It supports better day-to-day management, while also helping to drive long-term value and ensuring better cohesion between all stakeholders.