Commercial service charge management: benchmarking best practice

Abstract

Purpose

The paper benchmarks compliance for 2010‐2011 with the RICS Code of Practice for Commercial Service Charges 2006.

Design/methodology/approach

Whether the proxy adopted is measured by floorspace or number of commercial office buildings, the sample size conforms to Kreycie and Morgan's determination for representative sample size. Data are generated directly from the original documents provided to commercial leaseholders to ensure authenticity and remove the need for third party reporting of said data. This guarantees the data are valid.

Findings

The research discovers that compliance with the RICS Code of Practice for commercial service charges is poorly, if variably, implemented. This contrasts with claims by the professional body.

Research limitations/implications

The work only concerns 17 corporate tenants operating principally in the financial services sector and data are drawn from the clients of one property services company. Content analysis is utilised in order to interpret the data and requires some subjective judgement by the researchers. The work only refers to multi‐let office space in England and Wales.

Originality/value

Data are original and the paper offers a unique benchmarking test. This contrasts markedly with the anecdotal evidence offered by the profession in defending their standards of practice and whilst the paper has limitations, it is the largest and most accurate study yet carried out in the field.

Citation

Eccles, T., Holt, A. and Zatolokina, A. (2011), "Commercial service charge management: benchmarking best practice", Journal of Corporate Real Estate, Vol. 13 No. 4, pp. 200-215. https://doi.org/10.1108/14630011111214419