THE Royal Institute of Chartered Surveyors (RICS) has published a new edition of its Code of Practice for Service Charges and Commercial Property.

The second edition of this code comes into force this month, and gives guidance on alternative dispute resolution as a cost-effective means of resolving service charge disputes, sustainability issues, fair and reasonable service charges and to promote better communication between landlords and tenants.

The 2011 code will affect managing agents in their day-to-day management activities and in the way they keep and certify accounts.

The code defines what best practice is for surveyors.

Observing it (or failing to do so without good reason) will be a relevant consideration if the manager is alleged to have been negligent in the performance of theirmanagement duties.

Non-compliance will not always be negligent.

The code will also affect landlords, lawyers and accountants, although it is not binding on them.

The new code includes model lease clauses designed to assist complying with the guidance given.

It suggests that landlords and tenants should always have regard to the recommendations of the code when they negotiate lease renewals.

The code is good practice and surveyors are not obliged to follow it. It is also not binding on landlords, tenants or their lawyers. However, surveyors should encourage the parties strongly to adopt the code.

The parties may depart from it where appropriate in the light of such issues as size, nature or type of property, the extent of the service charge costs or their apportionment between occupiers, or to achieve best value.

Badly-managed service charges are a regular cause for dispute between landlords and tenants.

It is hoped, by setting out clear best practice in the management and administration of service charges, the level of disputes will decrease and the quality of service improved.