Service charge accounts and demands: what they must contain, and where to get a template

In England and Wales, routine service charge accounts are mostly driven by the lease and professional practice, not a fixed statutory accounts form. Scotland uses a different registered-property-factor regime, and Northern Ireland does not have an equivalent Landlord and Tenant Act 1985 service-charge accounts template.

What does a set of service charge accounts look like, and where can you get a template?

The Secretary-of-State-approved RICS Service Charge Residential Management Code, 4th edition, in force from 7 April 2026 and available free at rics.org, is now the lead service charge accounts template reference, ahead of the older 2011 ICAEW example. A normal year-end pack looks like a costs statement, budget-against-actual explanations, a balancing statement of assets and liabilities, notes, and any demand or credit notice; the RICS Code says this information should include “a summary of the costs and expenditure incurred, explanatory notes with details of variances between the budget and actual expenditure, a balancing statement of assets and liabilities with appropriate notes, and a compliant demand for payment, or notice of credit, as necessary.” No law fixes the form of routine accounts: ICAEW’s TECH 03/11 states, “The legislation does not contain any requirements for regular service charge accounts and therefore no provision for the form or content of such accounts.” For a service charge accounts example or Excel-style layout, use the RICS Code first, then ICAEW TECH 03/11 Appendix C, which says, “An example of service charge accounts is included in Appendix C.” Scotland requires registered factors to provide a yearly detailed financial statement; Northern Ireland has no equivalent statutory template.

What must a service charge demand say to be valid?

An incomplete landlord address makes the service charge not due at all until fixed, because Landlord and Tenant Act 1987 section 48 says that where the landlord has not given an address in England and Wales for service, “any rent, service charge or administration charge otherwise due from the tenant to the landlord shall… be treated for all purposes as not being due.” A valid service charge demand in England and Wales should also state the landlord’s name and address, since section 47 requires “the name and address of the landlord,” and it must be accompanied by the statutory rights-and-obligations summary because Landlord and Tenant Act 1985 section 21B says, “A demand for the payment of a service charge must be accompanied by a summary of the rights and obligations of tenants of dwellings in relation to service charges.” If that summary is missing, “A tenant may withhold payment of a service charge.” In England the prescribed title is “Service Charges – Summary of tenants’ rights and obligations”; in Wales the title must be bilingual: “Taliadau Gwasanaeth — Crynodeb o hawliau a rhwymedigaethau tenantiaid / Service Charges — Summary of tenants' rights and obligations”. A service charge demand template should therefore be checked against sections 47, 48 and 21B, not just copied from an agent’s invoice format.

How do you show a reserve fund in the service charge accounts?

A reserve fund is usually shown as a separate reserve balance with a movement note, while reserve transfers are shown separately on the income and expenditure account or in the notes. ICAEW TECH 03/11 gives the cleanest accounting presentation: “Where there are several reserve funds, the transfer or payment should be shown separately for each fund either on the face of the income and expenditure account or in the notes.” The 2026 RICS Code adds that where a balance is carried forward, “service charge accounts accompanied by a balancing statement and statement of reserves should be prepared and issued to leaseholders along with a compliant demand for payment or notice of credit.” In England and Wales, reserve service-charge money is held on statutory trust, and section 42 of the Landlord and Tenant Act 1987 allows it to be held “either as a single fund or, if he thinks fit, in two or more separate funds.” A separate bank account for the reserve fund is not a general legal requirement, although the 2026 Code says, “It is best practice to hold reserve funds and day-to-day service charge monies in separate accounts,” and the lease can require it. Scotland is different: for non-housing-association and non-local-authority factors, a sinking or reserve fund must be in an interest-bearing account for each homeowner group.

Last reviewed August 2026.

Sources

• RICS Service Charge Residential Management Code, 4th edition — “This information should include a summary of the costs and expenditure incurred, explanatory notes with details of variances between the budget and actual expenditure, a balancing statement of assets and liabilities with appropriate notes, and a compliant demand for payment, or notice of credit, as necessary.” Source
• Service Charges in Commercial and Residential Property, RICS-approved code availability in SI 2026/298 — “An electronic version of the approved code is available free of charge at www.rics.org.” Source
• ICAEW TECH 03/11 Residential Service Charge Accounts — “The legislation does not contain any requirements for regular service charge accounts and therefore no provision for the form or content of such accounts.” Source
• ICAEW TECH 03/11 Residential Service Charge Accounts — “An example of service charge accounts is included in Appendix C.” Source
• Scottish Government Property Factors Code of Conduct 2021 — “A property factor must provide to homeowners, in writing at least once a year (whether as part of billing arrangements or otherwise), a detailed financial statement showing a breakdown of charges made and a detailed description of the activities and works carried out which are charged for.” Source
• Landlord and Tenant Act 1985 section 40 — “This Act extends to England and Wales.” Source
• Landlord and Tenant Act 1987 section 48 — “Where a landlord of any such premises fails to comply with subsection (1), any rent , service charge or administration charge otherwise due from the tenant to the landlord shall (subject to subsection (3)) be treated for all purposes as not being due from the tenant to the landlord at any time before the landlord does comply with that subsection.” Source
• Landlord and Tenant Act 1987 section 47 — “(a)the name and address of the landlord, and” Source
• Landlord and Tenant Act 1985 section 21B — “A demand for the payment of a service charge must be accompanied by a summary of the rights and obligations of tenants of dwellings in relation to service charges.” Source
• Landlord and Tenant Act 1985 section 21B — “A tenant may withhold payment of a service charge which has been demanded from him if subsection (1) is not complied with in relation to the demand.” Source
• Service Charges (Summary of Rights and Obligations, and Transitional Provision) (England) Regulations 2007 regulation 3 — “(a)the title “Service Charges – Summary of tenants’ rights and obligations”; and” Source
• Service Charges (Summary of Rights and Obligations) (Wales) Regulations 2007 regulation 3 — “(a)the title “Taliadau Gwasanaeth — Crynodeb o hawliau a rhwymedigaethau tenantiaid / Service Charges — Summary of tenants' rights and obligations”; and” Source
• ICAEW TECH 03/11 Residential Service Charge Accounts — “Where there are several reserve funds, the transfer or payment should be shown separately for each fund either on the face of the income and expenditure account or in the notes.” Source
• RICS Service Charge Residential Management Code, 4th edition — “Where any balance is carried forward to a future year (positive or negative), service charge accounts accompanied by a balancing statement and statement of reserves should be prepared and issued to leaseholders along with a compliant demand for payment or notice of credit.” Source
• Landlord and Tenant Act 1987 section 42 — “Any sums paid to the payee by the contributing tenants by way of relevant service charges, and any investments representing those sums, shall (together with any income accruing thereon) be held by the payee either as a single fund or, if he thinks fit, in two or more separate funds.” Source
• RICS Service Charge Residential Management Code, 4th edition — “It is best practice to hold reserve funds and day-to-day service charge monies in separate accounts.” Source
• Scottish Government Property Factors Code of Conduct 2021 — “In situations where a sinking or reserve fund is arranged as part of the service to homeowners, an interest-bearing account must be opened in the name of each separate group of homeowners.” Source