The New RICS Service Charge Code: A Simple Guide for Leaseholders

For anyone living in a leasehold flat or serving as a director of a Resident Management Company, the initials RICS may be familiar — but the specific documents that the Royal Institution of Chartered Surveyors publishes to govern how residential blocks should be managed are less well known. That is beginning to change. The RICS Residential Management Code 4th Edition, which came into force in April 2026, introduces the most significant update to best-practice management standards in many years.

For leaseholders in Dorset and Hampshire, understanding what this code requires — and whether your managing agent meets those requirements — is now more important than ever.

At Rebbeck Brothers, as a RICS-regulated firm, we operate within this framework as a matter of professional obligation. This article explains what the 4th Edition means in plain English and what it means for you.

The RICS Residential Management Code: What It Is and Why It Matters

The RICS Residential Management Code is the authoritative industry standard for residential leasehold management in England and Wales. It governs how managing agents must handle service charges, communicate with leaseholders, maintain buildings, discharge insurance obligations and manage the compliance framework for the properties they oversee.

The code operates on a “comply or explain” basis for obligations expressed as “should” — meaning that a RICS-regulated agent must either comply with those obligations or provide a documented explanation of why they have not. Obligations expressed as “must” are mandatory and non-negotiable.

Q: What has changed between the 3rd and 4th Edition of the RICS Residential Management Code?

The 4th Edition introduces several significant changes. The most consequential include:

New Section 9 on Building Safety: The 4th Edition includes, for the first time, a dedicated section on building safety obligations arising from the Building Safety Act 2022. This section covers the responsibilities of managing agents in relation to higher-risk buildings, the Golden Thread of information, fire risk assessments, and ongoing safety case obligations. Given that the Building Safety Act represented the most fundamental change to building safety regulation since Grenfell, its incorporation into the core management code is long overdue.

Mandatory PPM Plans and Reserve Fund Requirements: The 4th Edition makes the preparation and maintenance of a Planned Preventative Maintenance plan, together with an adequately funded reserve fund, a strengthened expectation rather than a recommendation. Agents who cannot demonstrate how their reserve fund calculations are derived from a current PPM will be required to explain that position.

Insurance Commission Transparency: The 4th Edition tightens the requirements around disclosure of insurance commissions and other remuneration that managing agents receive from insurers. Leaseholders have a right to know whether their managing agent receives financial benefit from the insurance placement and, if so, how much.

Equality Obligations: The 4th Edition introduces enhanced guidance on equality and reasonable adjustments, requiring managing agents to consider the needs of disabled residents in the management of communal areas and in their communications.

Q: What does “comply or explain” mean for leaseholders?

When an obligation in the code is expressed as “should” rather than “must”, a RICS-regulated agent is expected to comply unless there is a documented reason not to. If a leaseholder asks why a particular practice is not being followed — such as the preparation of a PPM plan or the disclosure of insurance commission — the agent is required to provide a substantiated explanation. Leaseholders can raise concerns about non-compliance through RICS’s regulatory function.

For mandatory “must” obligations, there is no discretion. Non-compliance is a professional conduct matter.

Q: What is the new Section 9, and does it apply to your block?

Section 9 applies to all residential blocks managed by RICS-regulated agents, but its most stringent requirements are directed at higher-risk buildings — defined under the Building Safety Act 2022 as those over 18 metres or seven storeys in height with at least two residential dwellings. For these buildings, the duties around safety cases, Building Assessment Certificates, and the Golden Thread of information are extensive.

For lower-rise blocks — the majority of Dorset’s leasehold stock, which includes Victorian conversions and two- to four-storey purpose-built blocks — the section still applies in terms of fire risk assessment currency, fire door inspection records, and the obligation to ensure that safety-relevant information is maintained and accessible.

Q: What does the reserve fund requirement mean in practice?

Under the 4th Edition, a managing agent operating to code should be able to demonstrate that the reserve fund contributions being collected from leaseholders are calculated by reference to a current PPM plan. That plan should model the anticipated major expenditure on the building over a ten-year or longer horizon — roof replacement, lift overhauls, external decoration, structural repairs — and derive from it an annual contribution that avoids sudden large demands on leaseholders.

An agent who sets reserve fund contributions by reference to tradition or rough estimation, without a PPM plan to support the figure, is operating below the standard the code now expects.

Q: How does Rebbeck Brothers already meet this standard?

As a RICS-regulated firm, our management practices are aligned with the code as a matter of professional obligation. We maintain PPM plans for our managed portfolio, structure reserve fund contributions accordingly, and disclose insurance arrangements fully to our clients. The 4th Edition’s increased emphasis on building safety documentation and leaseholder transparency reflects practices we have been developing in earnest since the Building Safety Act came into force.

Where the 4th Edition introduces new requirements or strengthens existing ones, we have reviewed our procedures to ensure continued compliance.

Q: What should a Dorset leaseholder ask their managing agent?

Any leaseholder whose block is managed by a RICS-regulated agent has the right to ask the following: Does the agent operate to the RICS Residential Management Code 4th Edition? Is there a current PPM plan for the building? How has the reserve fund contribution been calculated? What remuneration, if any, does the agent receive in connection with the block’s insurance? Is there a current fire risk assessment, and has it been reviewed in accordance with the 4th Edition’s guidance?

An agent who cannot answer these questions clearly and promptly is not meeting the standard leaseholders should expect.

The RICS Residential Management Code 4th Edition raises the bar for residential block management across England and Wales. For leaseholders in Dorset and Hampshire, it provides a clearer framework for understanding what your managing agent should be doing — and a professional mechanism for addressing shortfalls. At Rebbeck Brothers, this code is not an aspiration; it is the foundation on which our management service is built.