Time is ticking…

As we near the end of March, and depending on how the service charge budget is structured in your building, many landlord appointed managing agents should be in the process of finalising last year’s reconciliations. The RICS Professional Statement on Service Charges in Commercial Properties states that “Detailed statements of actual expenditure, together with accounting policies and explanatory text, should be issued within four months of the service charge year-end.”

In our experience, it is very rare to find managing agents who are complying with RICS best practice and providing tenants with reconciliations within four months of year end. Ultimately, this means that some managing agents are not managing buildings in an optimal or efficient manner. In this climate of increased costs across all areas of commercial property, it is reasonable for tenants to expect to be provided with service charge reconciliations as soon as practicable. Clear and effective communication between tenants and managing agents should be prioritised when discussing the reconciliation process to ensure that there is appropriate management of expectations for both parties.

LJ Property Consultancy has a wealth of experience in this area and is committed to working with clients to ensure that budgeted or additional in-year spend is sufficiently interrogated and justified. This allows tenants to gain greater visibility and input on service charge management throughout the year. As a result of this, issues can be avoided at year end reconciliation. If this is an issue which you have faced, or this is an issue you would like to know more about, please reach out to us at info@ljpropertyconsultancy.co.uk to further explore how we can assist.