What the 2026 Residential Management Code update means for service charges in mixed-use developments

The RICS Service Charge Residential Management Code (4th edition) came into force on 7 April 2026 and now sets the professional standard for managing residential leasehold service charges in England. Published as a formal professional standard and approved by the Secretary of State, it carries significant weight and can be relied upon in courts and tribunals. For RICS members, compliance is mandatory. 

The updated Code is intended to raise standards, promote consistency and improve transparency, reflecting the evolving regulatory landscape, including the Building Safety Act 2022, Fire Safety Act 2021 and wider reforms such as the Leasehold and Freehold Reform Act 2024. 

For those involved in mixed-use and mixed-tenure developments, this is particularly important. Service charges in these environments are rarely straightforward, with residential, commercial and community uses often sharing infrastructure, services and safety responsibilities. The new Code is therefore not just a compliance update, it raises expectations around how service charges are structured, evidenced, approved and communicated. 

From SAY’s Mixed-Use team perspective, the 2026 update represents a clear step change. The direction of travel is towards a more professional, transparent and resident-focused approach, with stronger governance, better record-keeping and more consistent communication. A key development is the explicit application of the Code to housing associations and local authorities, providing greater clarity in mixed-tenure settings where multiple stakeholders operate within a single estate. 

Several changes stand out. There is a much stronger focus on building safety, with a dedicated section addressing higher-risk buildings, accountable persons and leaseholder protections, alongside enhanced information requirements. The Code also introduces more rigour around service charge accounting, requiring clearer alignment with lease provisions and stronger audit trails across budgets and reconciliations. 

There is also increased emphasis on record-keeping and governance, including clearer expectations around financial records, procurement processes and decision-making. In parallel, the Code reinforces the importance of transparency and resident communication, setting out the information leaseholders should receive and placing greater focus on fairness, accessibility and data protection. 

Taken together, these changes signal a shift to a more structured and accountable approach to residential service charges. The focus is no longer just on whether costs are recoverable, but on whether they are fair, well governed, transparent and clearly communicated. 

What does the update mean for service charges in practice?

 In practical terms, the updated Code places greater emphasis on the standard and quality of service charge management, raising expectations around how costs are managed, communicated and justified. 

For landlords and asset owners, this means stronger expectations around budgeting, cost allocation, year-end statements, reserve fund planning, insurance disclosure and internal governance. If a service charge decision is challenged, the supporting records and approval trail will matter more. That is especially true where costs are shared across different parts of a building or estate. 

For managing agents, RMCs and RTM companies, the operational bar is higher. Existing ways of working may still be sound, but they now need to be tested against a more demanding standard. Approval workflows, resident communication templates, document retention, accounting discipline and internal instructions all deserve a fresh review. The Code is relevant not only to professional managing agents but also to self-managed blocks and those carrying out management functions where variable service charges are payable. 

For residents and leaseholders, the intention is positive. The Code is designed to improve standards, support timely documentation and help reduce disputes. The greater emphasis on information, visibility and accountability should make service charge management easier to understand and less difficult to challenge constructively where concerns arise. 

Why does the 2026 Code matter so much in mixed-use and mixed-tenure developments?

This is where the conversation becomes more specific, and where SAY’s Mixed-Use perspective is especially relevant. The Code is particularly significant for mixed-use and mixed-tenure developments, where the complexity of managing multiple uses, occupiers and ownership structures is far greater than in single-tenure schemes. With private leaseholders, housing associations, commercial tenants and landlords all operating within the same estate, the need for clear, fair and transparent service charge arrangements is critical. 

The updated Code provides a stronger framework for apportioning costs, improving communication and ensuring accountability, helping to align expectations across different stakeholders. It also reinforces the importance of robust governance and long-term asset planning, which are essential in large, integrated developments. 

In our experience, service charge pressure points in mixed-use assets often arise not because a cost exists, but because the allocation or explanation is unclear. The 4th edition raises expectations directly in that area. 

What should landlords, managing agents, residents and leaseholders do now?

A sensible first step is to review current service charge processes against the practical themes in the new Code. 

Landlords and owners should look at approval workflows, management agreements, accounting controls, insurance disclosures and the clarity of mixed-use allocation methodologies. Managing agents should test whether budgets, reconciliations, resident notices and supporting records are consistent, timely and easy to follow. RMCs and RTM companies should make sure governance arrangements and documentation are strong enough to support decision making and withstand scrutiny. 

Residents and leaseholders should expect clearer information and more consistent communication. The Code supports a better standard of visibility around what is being charged and how those charges are managed. 

A more transparent and more accountable approach to service charges

The 2026 Residential Management Code update is not simply a technical rewrite. It reflects a broader shift in how residential service charges are expected to be managed. The focus is now more clearly on transparency, professionalism, record-keeping, fairness and communication, with a much stronger building safety lens than before. 

For mixed-use developments, that matters because complexity does not remove the need for clarity. It makes clarity more important. The more shared services, tenures and operational layers a building has, the more valuable it becomes to have service charge arrangements that are well structured, well evidenced and easy to explain. 

That is where practical advice makes a real difference. SAY’s Mixed-Use team works with landlords, owners, managing agents and resident management structures to help bring clarity to complex service charge arrangements, strengthen communication and support governance that reflects today’s expectations.