New RICS Service Charge Standard: What Tenants Should Know

With the second edition of the RICS Professional Standard on Service Charges in Commercial Property coming into force on 31 December 2025, corporate occupiers need to understand how these changes will impact their operations.

The update introduces stricter rules on fairness, transparency, and accountability – a significant step towards greater clarity and trust in service charge management.

Key Changes & What They Mean for You:

Mandatory Timelines
Budgets must be issued at least one month before the service charge year, with reconciliations completed within four months of year-end.

The benefit: Early visibility of costs and faster year-end clarity means improved budgeting accuracy and better cash flow management across your portfolio.

Greater Transparency
Formal certification of year-end accounts and independent reviews are now mandatory. Landlords must provide clear communication on budget adjustments and apportionment methods.

The benefit: Enhanced assurance in the accuracy of service charges, with clearer insight into cost calculations. This empowers you to identify discrepancies and challenge charges with confidence.

Streamlined Dispute Resolution
Alternative Dispute Resolution (ADR) is now recommended for service charge disputes, alongside new rules governing payment withholding during the resolution process.

The benefit: A faster, more cost-efficient mechanism for resolving disputes compared to traditional court action—saving both time and legal costs.

Value for Money Requirements
Service contracts must be benchmarked or competitively tendered every three years.

The benefit: Competitive pricing and assurance that services deliver genuine value, protecting your bottom line.

What This Means for Your Business?

For corporate occupiers, these changes deliver better visibility, stronger protections, and more control over costs. However, ensuring compliance and maximising the benefits requires specialist expertise.

How Cluttons Can Help

Our service charge consultancy team works exclusively with commercial tenants to ensure service charge costs are fair, reasonable, and deliver value for money in line with lease obligations.

Through comprehensive lease auditing, market benchmarking, and strategic recommendations, we identify cost savings and add tangible value – regularly delivering savings of thousands of pounds for our clients.

With the new RICS standard taking effect, now is the ideal time to review your service charge arrangements and ensure you’re positioned to benefit from these enhanced protections.