Service charge management at the dawning of the age of the professional statement

Abstract

PurposeThe paper provides a snapshot analysis on the state of service charge management at the point in which its regulatory framework by RICS changed from a voluntary code of practice to a mandatory professional statement.Design/methodology/approachThe data consist of a unique eight-year longitudinal study of service charge statements and practice (2010–2017). Because of the confidential nature of such business-sensitive information, this is a priceless study of real-world practice over such a long period and is able to illustrate both annual compliance and the year-on-year changes. Given this, it is recognised that data are skewed in favour of compliance because they are derived from an actively managed portfolio.FindingsThe results continue to illustrate long-running problems of non-compliance with “required” metrics. Given the inherent bias in the data, this is especially difficult to excuse. The paper also analyses the results in the light of the new RICS professional statement, which requires mandatory compliance. Whilst some of the metrics are advisory, there remain questions over how RICS might realistically enforce so many practitioners to change their existing performance and how willing the institution might be to actually prosecute failure. It also revisits the issue of institutionalised benchmarking of standards. Intriguingly, there are islands of almost perfect compliance, which offers an interesting contrast and raises further research questions on why some practitioners provide such exemplary work.Research limitations/implicationsThe data are derived from the clients of a UK property management consultancy. This does preclude any randomness to the sampling. However, the richness of the data and the methodology adopted provide valid data.Originality/valueThis work offers both unique data and an eight-year longitudinal analysis, but also a timely comparison with the requirements within a new RICS professional statement. This shift in regulatory regime reinforces the value of the work.