Why service charge is important in multi- tenanted property – Estate valuer




An Estate Surveyor and Valuer (ESV). George Madu, has said service charge is very important in a multi-tenanted property, stating that it is very crucial to know the differences between service charge and rent.

Madu, who spoke in an interview in Abuja recently, said, “Rent is simply a return or earning an owner receives from beneficial ownership of a property, while service charge is an additional levy on occupiers of a multi-tenanted property which is deployed towards carrying out maintenance and repairs of common areas and provision of common services necessary for proper functioning of a property occupied by several tenants.

“Service charge is not commonly known except for occupiers of multi-tenanted property. As the name implies, it is a charge besides rent which is levied on tenants or occupiers of such property for the maintenance of common areas, spaces, and provision of common services.

“The payment of Service charge by tenants within a multi-tenanted property provides a platform for managing these differences for the overall benefit of all. In operation, the service charge is managed by a third party which is an Estate Surveyor and Valuer”.

Giving a professional perspective, he said the beauty of Service Charge provides, creates a common purse, deposits of funds which all tenants contribute into for which they are entitled to the benefits to be delivered by an estate surveyor and valuer.

“The reasons and importance are very logical and rational. We are speaking of different sets of people with different objectives, aspirations, temperaments, maintenance cultures backgrounds and experiences in one property, who are supposed to enjoy the benefits of common services and common areas provided within multi-tenanted premises.”

Madu reiterated that an Estate Surveyor and Valuer is a professional legally certified, trained, and entrusted with the responsibility of managing of interests and property rights in assets.

“By training, an Estate Surveyor and Valuer is very vast, in the economics of land and properties, legal technicalities pertaining to their, ownership, use and deployment, valuation, and management of the interests of all stakeholders within the entire value chain.

“An important thing to note is that it confers a fiduciary responsibility of care, effective use, regular accounting and ensuring that tenants get value for their money. If not, you become culpable as a manger.”

ESV. Madu listed some functions of multi tenanted property, he explained that an Estate Surveyor and Valuer ensures that services are delivered and sustained within a multi-tenanted property.

“By ensuring that necessary repair works, cleaning, water, power, waste disposal, security, access control, interface with government agencies and the whole of demands of services to be rendered are not compromised.

In addition to those, he must be able to manage the temperaments, idiosyncrasies of each tenant, most times under tight budget regime, within un-abating upward inflationary trends, payment defaults by recalcitrant tenants, knowing that most often that you will never get a pat on the back.

“It a job that requires total commitment fit only for the nobles and gentlemen who will not bulk under the immense pressure of the demands of Service Charge regime, who in spite of all these demands will always come out clean in terms of accountability and transparency”, he said.