Section 87 (Codes of Management Practice)

Summary

1. This section gives the relevant Secretary of State (government minister) the power to approve any code of management practice which is submitted to them and is considered to “be designed to promote desirable practices in relation to any matter or matters directly or indirectly concerned with the management of residential property by relevant persons”.

2. A code of management practice approved under Section 87 has a special status and can be referred to during legal proceedings.

Matters which can be included in a Code of Management Practice

1. Section 87 gives the Secretary of State a wide discretion as to what may be approved:

i. It can be part, or all, of a code which is approved. The current approved codes of management practice clearly point out which parts are approved and which are not.

ii. It can relate to any pretty much any type of tenure from short let student accommodation through to long leases. The wording of the section does not though appear to include freehold properties which contribute towards estate charges.

iii. The code of practice can relate to any property management function including repairing a building, collecting rents and service charges, and other functions which are specifically mentioned in Section 87:

a) The resolution of disputes between tenants (including Leaseholders) and Landlords.

b) Competitive tendering for contractors.

c) Administration of trusts for Service Charge contributions.

Codes of Management Practice as evidence in a Court or Tribunal

1. Section 87 specifically states that failure to follow a code of management practice is not, in itself, a breach of the law. What it does say is:

i. An approved code of management practice is admissible as evidence.

ii. Where relevant, a court or tribunal should take account of a code of management practice in determining any question put before it.

Which Codes of Management Practice are currently approved?

1. The approved codes of management practice for residential property most relevant to Service Charge payers are:

i. Royal Institute of Chartered Surveyors (RICS): Residential Service Charge Management Code (2^nd Edition)

ii. Association of Retirement Housing Managers (ARHM): Code of Practice for Private Retirement Housing 

2. Other relevant codes of management practice for residential housing include:

i. Universities UK/Guild: Accommodation Code of Practice

ii. RICS: Rent Only Residential Management Code (2^nd Edition)

Click on the link to read more about the Leasehold Reform, Housing and Urban Development Act 1993