Accounting for service charges and service charge accounts in the property industry is a specialist area that requires expertise and an understanding of the sector. On this page you can access a range of articles, books and online resources providing quick links to practical guidance and background information.
Useful links
Service charge accounts and recovery of costs: Implications of Leasehold Valuation Tribunal decisions
Article published on 10 August 2011 which focuses on two recent cases in the Upper Tribunal (Lands Chamber) which 'should be of particular interest to those who advise upon and prepare service charge accounts on a regular basis'. The article has been written by Nicholas Kissen, Senior Adviser at the Leasehold Advisory Service, who explains the implications of these Leasehold Valuation Tribunal decisions.
The decisions in these cases can be obtained from the Lands Tribunal website at [2010] UKUT 283 (LC) and [2011] UKUT 268 (LC) respectively.
Accounting Standards Board
Information sheet 92
Information sheet issued by the Accounting Standards Board (ASB) on 10 May 2012 setting out a proposed UITF Abstract for 'Residential Management Companies Financial Statements'.
ICAEW
Concerns raised on service charge accounts
Article from Andrew Güntert, a member of the LSCA Technical Committee, highlighting questions raised at the LSCA Small Practitioners' Conference on the ICAEW's residential service charge accounting and reporting guidance. Published in May 2012.
Residential service charge accounts
Article from Mary-Lou Wedderburn, Consultant and Secretary to the Service Charge Accounts Working Party, which looks at TECH 03/11 and ahead to potential future developments. Published on the Talk Charity blog on 13 October 2011.
TECH 03/11 Residential service charge accounts (PDF 297kb/40 pages)
Guidance on accounting and reporting in relation to service charge accounts for residential properties on which variable service charges are paid in accordance with a lease or tenancy agreement. The guidance was prepared by a joint working group comprising representatives of the Association of Chartered Certified Accountants, ICAEW, the Institute of Chartered Accountants of Scotland, the Association of Residential Managing Agents and the Royal Institution of Chartered Surveyors. Published in October 2011.
Previous updates
Residential service charge accounts (PDF 152.48kb/1 page)
An alert issued by the ICAEW Service Charge Accounts Working Party on 12 October 2011 on the treatment of service charge transactions within statutory company accounts.
Service charge accounts - Q&As
Article from lecturer Mike Ulrich addressing some questions relating to service charges from the 2011 spring roadshows. The article first appeared in Audit & Beyond newsletter of ICAEW Audit and Assurance Faculty in September 2011.
TECH 01/10 Accounting for service charges (PDF 529kb/31 pages)
Consultation draft technical release issued by ICAEW, the Association of Residential Managing Agents (ARMA) and Royal Institution of Chartered Surveyors (RICS) in October 2010 for public comment. Withdrawn following the publication of TECH 03/11.
Service charge accounts (PDF 13.83kb/2 pages)
Guidance issued by the Audit and Assurance Faculty in April 2010.
Update on residential service charge accounts
Summary of legislation implemented and ICAEW Technical Releases issued on residential service charge accounts, published on 15 July 2010. The previous consultation draft TECH 03/07 (PDF 307.79/19 pages) has been withdrawn.
Legislation
Commonhold and Leasehold Reform Act 2002
Full text of the Act as originally enacted, with additional explanatory notes.
Housing and Regeneration Act 2008
Full text of the Act as originally enacted, with additional explanatory notes.
The Approval of Code of Management Practice (Residential Management) (Service Charges) (England) Order 2009
Full text of the Statutory Instrument as enacted.
Guides and publications
Association of Residential Management Agents (ARMA)
Association of Residential Management Agents
Organisation which focuses ‘exclusively on matters relating to the management of residential leasehold blocks of flats’.
Companies House
Flat Management Companies (PDF 320kb/18 pages)
Booklet published by Companies House in February 2009 which aims to 'assist people who run a company that has been formed to manage a property divided into a number of separate flats'.
Leasehold Advisory Service
The Leasehold Advisory Service
Public body which provides free advice on the law affecting residential leasehold property in England and Wales and produces a number of useful publications available for download, including one specifically on service charges.
Royal Institution of Chartered Surveyors (RICS)
Service charges in commercial property: A Code of Practice
The RICS Code of Practice, published in June 2006 and updated in 2011, came into effect for service charges beginning on 1 April 2007 or any date thereafter. The website also includes a list of industry standard cost headings which can be downloaded in PDF format.
Service charge residential management code (PDF 473.77kb/85 pages)
Guidance given as part of the Explanatory Memorandum to The Approval of Code of Management Practice (Residential Management) (Service Charges) (England) Order 2009.
Commercial property service charge handover procedures 2011
Information paper regarding service charge accounts handover procedures and compliance with the revised RICS Code of practice: Service charges in commercial property.
Other sources
Service charges within the UK office market: Evidence on accounting practice, compliance and disclosure (PDF 399.4kb/61 pages)
Report produced for Kingston University London by Dr Timothy Eccles and Dr Andrew Holt in November 2009. It gives analysis of current practice in service charge budgets and certified accounting statements and discusses the impact of the RICS Code of Practice for Commercial Service Charges on accounting and disclosure.
Articles and books in the Library collection
To find out how you can borrow books from the Library please see our guide to book loans.
You can obtain copies of articles or extracts of books and reports by post, fax or email through our document delivery service.
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