Evaluation of Service Charge Determination Methods in Management of Multi-Tenanted Residential Properties in South-East Nigeria (Published)
Service charge is a levy paid by occupiers of a multi-tenanted property to fund the maintenance and services of facilities that are commonly used by the occupiers. Service charge determination is an integral and important aspect of service charge administration. It has been perceived that most of the Estate Surveying and Valuation firms do not apply the appropriate method of determination of service charge payable by occupiers of multi-tenanted residential properties in South East Nigeria. The aim of this study is to evaluate the application of service charge determination methods in management of multi-tenanted residential properties in South East Nigeria. The study adopted quantitative research design to evaluate the application of service charge determination methods in the management of multi-tenanted residential properties in South East Nigeria. The study was carried out in the five South Eastern States of Nigeria namely; Anambra, Enugu, Imo, Abia and Ebonyi. The population of the Study was 102 Estate surveying and Valuation firms who are into service charge administration. Data collected were presented with the use of frequency table. Mean ranking was used to analyse the data and the hypothesis was tested with One-way Analysis of Variance using of SPSS. The result from the analysis revealed that the most applicable method of determination of service charge in South East Nigeria is service charge as agreed with Tenants, followed by Service Charge as Percentage of Rent. It is good to note that the two most applicable methods of determining service charge in South East Nigeria do not have any professional or scientific basis. The analysis of variance produced a F-value of 0.360 with a significance (p-value) of 0.34. Since this p-value is greater than the 0.05 level of significance, the difference in mean scores across the states are not statistically significant. Based on this result, the null hypothesis (H01), which states that there is no significant difference in application of service charge determination across the South-Eastern States of Nigeria was accepted. This simply means that the Estate Surveying and Valuation Firms in the five south Eastern States applies the same method in determination of service charge. The Practicing firms of Estate Surveying and Valuation managing multi-tenanted residential properties in South East Nigeria applies majorly unprofessional methods (service charge as agreed with tenants and service charge as percentage of rent) in determining the service charge payable by occupants. The study recommends that Estate Surveying and Valuation firms managing multi-tenanted residential properties in South East Nigeria should apply Contractor’s method in determining the service charge payable by occupiers of their properties. This method is most appropriate because it is based on market data and it ensures that the actual cost required for the maintenance of commonly used facilities is realized.
Keywords: Determination, Management, Methods, South East Nigeria, multi-tenanted residential properties, service charge