Following on the launch in April 2007 of new Guidance for Landlords and Managers on Service charges in England and Wales, the RICS has now produced a Scottish version of the Service Charge Code, which was formally launched in Edinburgh this month. The Scottish Code came into effect on 11 September and will apply to service charges commencing on 1 April 2008 or any date after that.
As with its sister English Code, the Scottish Service Charge Code is intended to reflect best practice, and while it is not proposed, nor does it have the effect of overriding the terms of existing leases, it is intended to be aspirational in those cases, with the expectation that property managers will, where possible, emulate the tenets of the Code.
This Scottish edition is truly a "kilted" version of the English Code – word for word, except in the instances where law or practice diverges this side of the border, for example in regard to lease renewals. There is no equivalent of the Landlord and Tenant legislation in Scotland, and with one rather limited exception, no statutory right to renew a lease. However it is often the case that on expiry of a lease the parties may want to renew the relationship on similar terms and conditions for a further period, and the Code exhorts parties to take the opportunity in those circumstances, of modernising the approach to service charge in line with the Code.
For our commentary on the Service Charge Code – see the article in the February 2007 edition of Open Door on our website.