UK OCCUPIER SATISFACTION INDEX 2009 PROPERTY INDUSTRY ALLIANCE
AND CORENET GLOBAL UK
Home : Qualitative findings : Summary by question

How satisfied are you that the property owners that you currently deal with are seeking to comply with the RICS Code of Practice for Service Charges in Commercial Property?

Some occupiers report an improvement in industry compliance with the Code. However, many feel that property owners are not complying sufficiently, and that the Code lacks teeth. Service charge transparency remains a major concern for occupiers

Some improvements in compliance with the Code are noted 'There has been an improvement in this. A lot of landlords are now trying to comply, which wasn't the case a year or two ago. It's driven by the economic climate.'

'We are starting to see the Service Charge Code coming through and managing agents are saying they are adopting it. It should be mandatory.'

'Managing agents are becoming more aware of the need to adhere to the Code. It's an improving scenario, it's an improving trend.'
However, many feel that property owners are not complying sufficiently 'They say they are complying. Their letters proudly announce it, and then they go and do something that's totally not in the Code.'

'Most landlords are reluctant to comply, they will at a push. We've recently appointed a service charge consultant to look into two centres where we have major concerns.'

'All it seems to have done is change the way in which budgets and accounts are presented. It was supposed to weed out overcharging of service charges, but there is no great evidence that this has happened.'
Some feel that the Code lacks teeth 'I don't rate the RICS Code; it's too lightweight and lacks teeth. It allows some of the poor behaviour to continue.'

'The RICS has no control over firms who are not accredited to them.'

'The Code is not well policed.'
Occupiers feel strongly that service charges should be more transparent 'There is nowhere near enough transparency or accountability when it comes to service charges. We should get full access to final accounts but we don't, we only get access to the summary accounts which can be manipulated.'

'They are still trying to hide things and it is clearly stated in the Code that this should not happen. We are still left to question many things.'

'Accountability and transparency of service charge is still a big issue.'
Some feel that property suppliers are paying lip service to the Code 'Most landlords and agents are seeking to comply, and increasingly so. Some pay lip service to it, so there's room for improvement.'

'We have found that even a major landlord who was part of the working party to define the Code isn't honouring it fully.'

'Service charges have got to be the next big thing. At the moment it's words not deeds. The Code is a good starting point, but it would be helpful if the industry could spell out what they are doing to comply.'
Larger landlords are more likely to comply 'The bigger landlords are complying. Some of the smaller property suppliers have a long way to go in terms of transparency and accountability of service charge.'

'The larger landlords seek to comply. A lot of the smaller ones, and the managing agents too, seem to have no idea.'

'Our portfolio is small properties and none of the landlords we deal with show any recognition of the Service Charge Code. The managing agents do not seem to be taking this on board either.'
Some occupiers are forcing property owners into compliance 'I've had no landlord voluntarily agree to comply in the lease with the Code. It's always at my request. I don't think they will comply unless they're forced into it.'

'More landlords are adopting the Code and tenants are forcing them to where they can, by asking and demanding that the Code is adhered to. The managing agents have to be seen to be adopting it.'