Tony Pennison
Partner
Service charge accounting
Service charge accounting specialists supporting landlords, managing agents, Residents' Management Companies (RMCs), Right to Manage (RTM) companies and property owners
Landlords, managing agents, Residents’ Management Companies (RMCs), Right to Manage (RTM) companies and property owners all have responsibilities for preparing accurate and transparent service charge accounts. Whether you require accounts to be prepared, independently reviewed, certified or audited, our experienced team can help ensure they comply with the relevant lease obligations and professional guidance.
At Price Bailey, we provide specialist service charge accounting services for residential, commercial and mixed-use developments. We work with portfolios of all sizes, delivering practical advice, reliable turnaround times and clear communication throughout the reporting process.
What service charge accounts are and who needs them
Service charge accounts summarise the income collected and expenditure incurred in maintaining and managing a property over an accounting period. They provide transparency for leaseholders, landlords and managing agents, while helping demonstrate compliance with the terms of the lease and applicable professional guidance.
Depending on the property and lease, service charge accounts may be prepared, independently reviewed, certified or audited. Residential and commercial developments are subject to different reporting frameworks and lease obligations, making specialist advice important.
Residential service charge accounts
Our team prepares residential service charge accounts for landlords, managing agents, RMCs and RTM companies in accordance with lease requirements and recognised industry guidance.
Topics covered include:
- TECH 03/11 current best practice guidance as set out by the ICAEW
- Accruals accounting
- Balance sheets and supporting disclosures
- Section 21 summaries of relevant costs
- Section 20 consultation requirements
- Section 20B 18-month rule
- Reserve and sinking funds
- Statutory accounts for RMCs and RTM companies
- Lease compliance and best practice
Commercial service charge accounts
Commercial service charge accounting is often driven by lease requirements and professional standards rather than legislation alone. Our specialists work with landlords and managing agents to provide independent reporting that supports transparency between landlords and occupiers.
We can assist with:
- RICS Service Charges in Commercial Property (2nd Edition)
- TECH 09/14 (revised March 2026)
- ISRE 2400 (Revised) review engagements
- Independent certification and reporting
- Lease compliance and best practice
Mixed-use developments
Mixed-use developments require careful consideration where residential and commercial elements operate under different leases and reporting frameworks. Preparing accurate service charge accounts often involves allocating costs between separate schedules while ensuring each element is reported appropriately.
Our specialists regularly support mixed-use developments with:
- Residential and commercial service charge apportionments
- Separate reporting frameworks where required
- Irrecoverable VAT considerations
- Option to Tax implications
- Recovery of shared utilities and energy costs
- Independent review and reporting
Preparing for the 2027 leasehold reforms
The Leasehold and Freehold Reform Act 2024 is expected to introduce significant changes to service charge reporting from 2027. Managing agents, landlords and property owners should begin reviewing their current processes to prepare for the new requirements.
Key changes are expected to include:
- A standardised service charge demand form
- Mandatory annual reporting
- A prescribed reporting framework for service charge accounts
- Enhanced leaseholder information rights
- Insurance and commission disclosure requirements
- Changes to litigation cost recovery
Early preparation can help reduce disruption and ensure existing processes are ready as the reforms are implemented.
How we work with managing agents
Preparing service charge accounts across multiple developments requires efficient communication, agreed processes and reliable delivery. We work closely with managing agents to establish practical workflows that reduce administration while helping reporting deadlines stay on track.
Our approach includes:
- Straightforward portfolio onboarding
- Agreed reporting timetables
- Standardised data handover formats
- Compatibility with leading property management software
- Dedicated point of contact
- Clear turnaround commitments
- Regular communication throughout the engagement
Whether managing a handful of developments or a large national portfolio, we aim to make the preparation of service charge accounts as efficient and straightforward as possible.
Our service charge services
We provide a comprehensive range of service charge accounting services tailored to landlords, managing agents and property owners.
- Low temperature hot water accounts review
- Service charge accounts preparation
Preparation of service charge accounts in accordance with lease requirements and recognised professional guidance. - Independent review and certification
Providing independent reviews and certifications where required under the lease or by stakeholders. - Service charge audits
Carrying out audit engagements where the lease specifically requires an audit of the service charge accounts. - Section 21 summaries
Preparing summaries of relevant costs in response to leaseholder requests. - Managing agent handover reviews
Supporting smooth transitions between managing agents through independent reviews of service charge records. - Lease expenditure reviews
Reviewing expenditure against lease provisions to support transparency and consistency. - RMC and RTM company accounts
Preparing statutory accounts alongside service charge accounts where required. - Company secretarial services
Supporting RMCs and freehold companies with ongoing statutory obligations. - First-tier Tribunal (Property Chamber) support
Providing accounting expertise to support disputes relating to service charges. - Tax advice
Advice on Corporation Tax, VAT, trust reporting and capital allowances where relevant.
We can help
Contact us today to find out more about how we can help you
