SERVICE CHARGE ADMINISTRATION
In a Multi-Tenanted Property, there are certain Common Services, which by nature can only be provided by the Landlord for the Tenants’ use.
Where this is not done by the Landlord, it may affect the Investment Potential of the Property as it relates to Maintenances Cost; as all the Tenants or Occupants may not be willing to take direct responsibility to ensure that such Services are provided effectively and efficiently.
This is the reason it becomes necessary for the Property Owner to provides these Services through his Management Agent. The Agent provides these Services, but the Tenants make contribution and payment is made annually in advance for it. The amount contributed is shared among the Tenants through what is called ‘Service Charge Apportionment’.
This amount chargeable is subject to change on the anniversary date of the leases and it is adjustable upwards or downwards depending on the amount expended in the preceding year and the budgetary estimate for the following year. Since the money so collected belongs neither to the Landlord nor the Managing Agent, a separate service charge account will be maintained and the need for proper accounting cannot be over emphasized. Tenants have over past years voiced concern as to the quality and accuracy of service charge budget and expenditure reporting. Experience suggest that Tenants will request more detailed information and would want the service charge account to be managed in an efficient and effective manner. If given the privilege to serve as the Managing Agent, taking all the luxury/serviced properties in question, the service charge liveable will be expended on the following.
(a) Provision of security staff, car park attendant and security materials.
(b) Maintenance repairs, Servicing and provision of diesel for the stand-by generator.
(c) Maintenance of the fire fighting equipment and installation including regular replacement of non-functional and/or obsolete fire extinguisher.
(d) Maintenance and dislodgement of septic tank and soak away pit.
(e) Replacement of burnt out bulbs, maintenance of electrical systems excluding replacement of major items. (f) Cleaning of common parts, polishing of staircase, ceiling including removal of cobwebs in common areas, refuse disposal and inclusive of periodic redecorations.
(g) Payment of water Bills, Electricity Bills accruing on meter feeding the common parts and where a central maximum demand mater in place, the apportioned of bills using estimated consumption parameters.
(h) Maintenance of lifts, repairs contracts maintenance where necessary.
(i) Maintenance of water pumps tanks.
(j) Maintenance of the office of the premises management.