The effect of service charge responsibilities on tenants’ leasing experience and satisfaction

2022

PurposeThe paper utilises formality-informality modelling to examine occupational change, using commercial service charge management as its case study.Design/methodology/approachThis is a conceptual paper that develops a typology for applying formalisation to occupational change and then utilises historiography to generate a narrative on the evolution of service charge management.FindingsFormality is seen as a method of improving transparency and performance as a “modern” response to a range complaints about professional performance. Whilst real improvement failed to develop, a “snowball” of continued formalisation remained the perceived solution, leading to centralisation of measures of professional performance.Research limitations/implicationsThe work is a conceptual paper that develops a historiography on the development of service charge administrative practice. Whilst it relies on objective data and secondary literature, the narrative that is developed is subjective and interpretive.Originality/valueThe conceptual nature of the work offers potential insights into occupational organisation. It suggests that formalising procedures in itself does not improve performance.

Section: The Case Studymentioning

confidence: 99%

Formality and informality and the generation of occupational performance: a case study on the commercial service charge

2022

“…One might also expect that precedent from property matters within the courts system would drive clause writers to coalesce around proven solutions and standardise against judgements. However, where the clarity and content have been the subject of investigation (see, for example, Halvitigata, 2018; Holt and Eccles, 2019), despite the existence of best practice “standard forms”, the quality and clarity of leases still being drawn up has been described as “a legal barrier in the development of best practice” (Holt and Eccles, 2019, p. 285).…”

Section: Service Charge In Practicementioning

confidence: 99%

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

2020

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.

“…Literature review UK commercial service charges have, in the last few years, been the subject of increased professional scrutiny after many years of being seen as problematic, yet unimportant (see, e.g., Calvert, 2008;Eccles and Holt, 2009;Eccles et al, 2011;Holt, 2015). There has also been international discussion on the issue as well (see, e.g., Halvitigala, 2018). The result is a number of editions of a voluntary code of practice drawn up by RICS and a number of trade bodies.…”

Section: Introductionmentioning

confidence: 99%

Leases as inhibitors of best practice in service charge management

Holt

2019

Purpose The relationship between the owner and an occupier of a commercial property is determined by the lease, inasmuch as it sets out the legally enforceable duties and obligations of each party. However, it is only that, a legal framework; it is not a practical management handbook on how best to operate the premises and generate an amicable business relationship. The purpose of this paper is to consider the role of the lease in reinforcing and disrupting the generation of best practice within real estate management. Design/methodology/approach The paper examines actual leases to understand the service charge and how data pertinent to it is collected, disseminated and interpreted by both parties in carrying out their activities within and about the property. This is then benchmarked against provisions of the Service Charge Code of Practice. Findings Despite a number of incarnations of a code of practice on service charges during the lifetime of the leases examined, the research finds a troublingly small uptake of its ideas within new leases. Practical implications The findings predict future problems in the practical management of multi-tenanted properties, coupled with a call that leases are written to the Code’s requirements. Originality/value No such lease examination has been undertaken to date.